22 + years as successful real estate investors sought a refinance + 100% Funds Control 1st Trust Deed on this commercial investment property in Palm Springs, Riverside County, CA. The purpose of this loan is for the current building owners to pay off an existing, current and in good standing $796K 1st TD and the balance of our loan will be placed into Funds Control to complete construction on this fully renovated investment property. Borrowers personal “skin in the game” is over $1.9M: property acquisition, soft and hard costs to date on completed permanent property improvements. Mortgage Vintage had an independent 3rd Party Construction Feasibility Review confirm our Funds Control will complete project.
The subject property is a 12,386 SF, two-story commercial building sitting on a 20,037 SF lot in the “North Palms Springs Business Center” of Palm Springs, CA. The subject property is very well located just off the 10 freeway and surrounded by similar commercial-industrial buildings and business parks. Additionally, the subject property is also very well located because of the upward pressure on the need for warehouse space in this area due to the fact “Amazon” has purchased nearby and is beginning development of their Super-transit sites.
The subject property operated as an Indoor Rock-Climbing facility prior to the borrowers’ purchase. Since their acquisition, borrowers have doubled the SF of the subject property by adding a second floor, installing multiple roof A/C units with a water reclamation system, a fire suppression system throughout the property, and installed an upgraded 1600-amp electrical supply and 3” natural gas line. The subject property also features one freight elevator.
The subject property is leased to a single tenant currently paying $25K month. Once construction is complete with an updated certificate of occupancy, the Tenant’s lease raises to $65K a month. Tenant will operate their established cannabis cultivation, manufacturing, storage and distribution business out of subject property. Subject property is zoned I-P – Industrial Pink Zoning District which permits Cannabis Businesses with approved Provisional Cannabis Licensure. All of the required cannabis licenses are in place. An additional positive to this subject property’s location is that the Palm Springs City re-zoned the area where subject property is located in to be an exclusive “Cannabis Green Zone”, which prevents any other City areas being developed for Cannabis use. This designation has driven development to this area. A part of the re-zoning calls for lower taxes and fast track licensing.
What we like about this Trust Deed opportunity:
- 13.50% Investor Interest Yield
- 1st TD on a fully renovated commercial building just off the 10 FWY in Palm Springs, CA
- $1.9M+ Borrowers Total “Skin in the Game” to Date
- 33.33% LTV on ARV / 30.25% Net LTV on ARV/43.25% LTV on As-Is Value
- 100% Funds Control
- 6 months guaranteed interest
- 7 months prepaid interest
- $5M Gross Protective Investor Equity After Completion Appraised Value
- “No Further Action Required” Environmental
- Class B Building
- All permits/licenses are approved and in place; and subject property is legally conforming
$2,500,000 1st TD @ 13.50%, 33.33% LTV on ARV, Commcl, 24 mos. $78,125 Min Inv, Palm Springs CA
