NEWPORT BEACH, CA—The financing of “fractured” condominiums needs to be structured in a manner that gives the lender all of its normal underwriting sizing guidelines, while also providing the operator the flexibility to execute its business plan, mortgage-banking firm MetroGroup Realty Finance's VP Scott Botsford tells GlobeSt.com.
There has long been a stigma surrounding these commercial condominiums—projects where only a portion of units were sold as originally intended and the remaining units leased due to slow sales, often brought on by a downturn in market conditions. As the economy recovery continues and the market remains strong, there has been an increased interest in acquiring these properties, but due to their complicated nature, financing can be difficult to secure, even for highly promising opportunities.
MetroGroup recently secured $7.5 million in acquisition financing for Kihei Commercial Center, a multi-tenant industrial/flex complex in Kihei, HI, on the island of Maui, on behalf of a real estate investment and management company based in Irvine, CA. The transaction is an example of a fractured-condo deal where the buyer was successful in acquiring financing.
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
