Finance Mortgage Banking
June 20, 2008
By: Scott Baltic, Contributing Editor
A Los Angeles–area developer is in a bind. He’s redeveloping a retail/restaurant strip mall and is well along with entitlement, but now he can’t get additional funding to finish that process, jeopardizing the entire project, even though the deal is sound and the property continues to generate rents.
Enter a $600,000 bridge loan/second mortgage from a new commercial real estate mortgage pool fund by Wilshire Finance Partners, Los Angeles. The Wilshire Income Fund, recently launched by this start-up company, is targeted at opportunities like this, where a swing or bridge loan can save the day for a good project, Wilshire CEO Thom Obryon (pictured) told CPN.
In all the market gyrations he’s seen in 30 years in real estate, Obryon said, “This is one of the most opportunistic swings we’ve ever seen.” One result is that solid projects risk going under because banks have backed off too far from real estate lending. Obryon notes that he and his business partner, Wilshire president Kevin DeMeritt, have each put $1 million of their own money into the fund.
“Banks aren´t lending on good properties,” DeMeritt told the LA Business Journal earlier this week. “Maybe a borrower’s credit rating isn’t up to the bank’s snuff, but when you put everything together it is a perfectly fine loan that would have made sense nine months ago.”
The Wilshire Income Fund is limited to California properties and investors, Obryon said, but the company is also in the process of setting up a Regulation D fund. The income fund’s goal is $100 million of funding, though Obryon declined to specify how much of that has been raised or deployed. The fund is also targeting a loan-to-value goal of 65 percent.
By: Scott Baltic, Contributing Editor
A Los Angeles–area developer is in a bind. He’s redeveloping a retail/restaurant strip mall and is well along with entitlement, but now he can’t get additional funding to finish that process, jeopardizing the entire project, even though the deal is sound and the property continues to generate rents. Enter a $600,000 bridge loan/second mortgage from a new commercial real estate mortgage pool fund by Wilshire Finance Partners, Los Angeles. The Wilshire Income Fund, recently launched by this start-up company, is targeted at opportunities like this, where a swing or bridge loan can save the day for a good project, Wilshire CEO Thom Obryon (pictured) told CPN.
In all the market gyrations he’s seen in 30 years in real estate, Obryon said, “This is one of the most opportunistic swings we’ve ever seen.” One result is that solid projects risk going under because banks have backed off too far from real estate lending. Obryon notes that he and his business partner, Wilshire president Kevin DeMeritt, have each put $1 million of their own money into the fund.
“Banks aren´t lending on good properties,” DeMeritt told the LA Business Journal earlier this week. “Maybe a borrower’s credit rating isn’t up to the bank’s snuff, but when you put everything together it is a perfectly fine loan that would have made sense nine months ago.”
The Wilshire Income Fund is limited to California properties and investors, Obryon said, but the company is also in the process of setting up a Regulation D fund. The income fund’s goal is $100 million of funding, though Obryon declined to specify how much of that has been raised or deployed. The fund is also targeting a loan-to-value goal of 65 percent.
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