First Trust Deed collateralized by an approximately 367,000 square foot mall in Nampa, ID (about 22 miles west of Boise, ID). Current tenants in this mall include national brands such as Big 5 Sporting Goods, Ross Dress for Less, and Jo-Ann Fabric as well as 30+ local tenants. The property is currently operating at a 36% vacancy however retail vacancy for this market is about 10%. Do to the declining consumer appetite for traditional mall space, it is the borrower’s intent to demolish a portion of the mall and turn it into a lifestyle center. To do this, the borrower will demolish approximately 30% of the in-line shop space and remove most of the interior corridors. In addition, the borrower will renegotiate leases with two of the big tenants to move their space as well as increase the duration of their lease. On top of that, the borrower will bring in two big box tenants to absorb a large amount of the vacant space. Given this property has more vacancy than the surrounding properties, it is the borrower’s intent to lease up the remaining space before he puts the property on the market for sale. Loan Amount: $11,000,000 Yield: 10.5%
The properties consist of 7.5 acres of land which was purchased by the borrower in 2016 from the Bureau of Land Management (BLM). Since that time, the borrow has gone through many different rounds of negotiations with the county over land use to get the property rezoned. As of today, the plan is getting a rural subdivision approved to allow for the development and construction of 13 homes. It is anticipated that the property will be fully entitled and ready to develop by the end of the year at which point the borrower will enter into a joint venture agreement with a local homebuilder. Loan Amount: $1,150,000 Yield: 10.5% (Principal Balance ≥ $100,000); 10.0% (Principal Balance < $100,000) Interest is paid monthly in arrears with payments due on the 1st of each month with a 10-day grace period. Term: Six months with an optional six-month extension at maturity.
First Trust Deed collateralized by a partially completed, 14,787 square foot geriatric behavioral hospital in Bullhead City, AZ which is approximately 100 miles southeast of Las Vegas, Nevada. The facility will have 14 client units with a total of 24 rentable beds. Directly across from this 3.57 acre site is an adult day care facility that pairs well with the borrower’s intended use. Since acquiring the site, the borrower successfully obtained the desired zoning change to allow the construction of this facility as well as began construction on the site. As of January 2019, the borrower was almost finished with the framing of the building. It is anticipated the facility will be completed and operational by the end of 2019. Once the building is operational, it will be managed by ERS1 Management who is led by Ron Stewart. The management team has a combined experience in the senior healthcare arena of over 150 years. Loan Amount: $5,600,000 Yield: 10.5% (Principal Balance ≥ $100,000); 10.0% (Principal Balance < $100,000) Interest is paid monthly in arrears with payments due on the 1st of each month with a 10-day grace period. Term: 9 months with one optional nine-month extension period at maturity. Video