(To read more on the debt and equity markets, click here.)
HEBRON, MD-Porter Mill Road Properties received approval for land it owns here to be developed into a mixed-use community days after it received last-minute funding. Richard DeVincentis and Larry Higgins of Porter Mill had planned to get its parcel approved for a mixed-use community and then sell off pads to developers/builders. The project would have as many as 2,400 residential units, offices and apartments, twin and single-family homes, estate homes, a school, condominiums, age-restricted villas, medical offices, assisted living, senior apartments and commercial areas.
Porter Mill intended to use its raw land as collateral for a loan it needed to complete the transaction. As the purchase date drew nearer, the bank began pulling back, citing restrictions and red tape. It approached Hackensack, NJ-based Kennedy Funding, a direct private lender that specializes in using raw land as collateral.
"Hardly anyone in the industry does this," Jeffrey Wolfer, Kennedy co-CEO tells GlobeSt.com. "Banks just do not want the hassle of taking raw land as collateral. Also, they prefer having an income stream from a building." Last year Kennedy Funding did approximately $150 millions in loans based on raw land.
The $7.8-million loan to Porter Mill Road Properties was brokered by Weichert Commercial Brokerage. "Porter Mill Road Properties was a good business transaction for both of us, especially with the borrowers bringing $6 million to the table," notes Wolfer. "We closed the Porter Mill Road Properties deal in just two weeks, and that was with Memorial Day thrown in."
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
