Very successful, current MVI borrower with a consistently “on time” paying track record sought a 2nd TD cash out refinance loan on this 38,000 SF commercial building in Adelanto, CA. The purpose of this loan is to pay off an existing, current and in good standing Mortgage Vintage 2nd TD that is maturing in June 2023 as well as a 3rd TD borrower took out last year for final upgrades to an onsite, multi-level, super-structure for mass-producing indoor cannabis cultivation. A remaining $400K balance of cash out will be used for LED light upgrades in cultivation rooms. “American Apothecary” grossed $10.8M in 2022, with net income of $3.9M after all expenses including mortgages. P&L in investor Dropbox. Borrower is the Founder/CEO of an international real estate investment and property management corporation with locations in Tokyo, Japan and Torrance, CA in addition to the real estate owner of this subject property and its cannabis business “American Apothecary” operating out of this subject property.
The 1st TD on this subject property is also with Mortgage Vintage with at $5.5M principal balance, at 15.00% note rate maturing November 1st, 2024. This new 2nd TD matures at the same time as the 1st TD. Exit strategy for both MVI 1st & new 2nd TD: sale of property + business for $20M – $25M to interested Japanese investor. Borrower in negotiations on final sales price. This loan offers $6,152,000 gross investor protected equity and 6,411,875 net investor-protected equity off a new $13,500,000 As Is Appraisal. No cannabis value considered in this new appraisal; commercial value only in this Logistics and Distribution industry heavy Adelanto, CA area.
The subject property is a two story, commercial-industrial building comprised of 38,000 SF rentable space located on a .69 acre parcel with a single rollup truck door and 24×7 gated guard. This subject property is 100%, fully occupied, single tenant, borrower’s cannabis company, paying $130,000/per month in rent with 3% annual increases. All required state and local cannabis licenses and permits in place.
Subject property is very well located in the heart of California’s cannabis industry growth center in Adelanto CA, next to the Southern California Logistics Airport also known as “Victorville Airport” a large commercial use airport designed to provide major corporations with logistics needs, access to a global gateway to the Western United States. Located also near Interstate 15 FWY. and the city of Victorville.
