Star News

Keeping abreast of the economic environment both nationally and globally, has become a daunting process. Regardless of where consumers turn, there is evidence of a crumbling economy in the ongoing negative news. While many consumers are waiting for the environment to settle, there are contrarians among us who are poised and ready to take advantage of the opportunities in real estate that are becoming readily available. A significant volume of our loan requests are from developers and/or investors who have an opportunity to buy out their respective partners at a discount or, acquire properties that are almost certain to be headed for foreclosure.

Value-added opportunities are more prevalent at this time due to initially ill-conceived or undercapitalized transactions taking longer than anticipated to execute. Investors who are well-stocked with cash resources, positioned with joint venture partners, and armed with lines of credit, are acquiring available properties or overtaking majority shares and retaining the original sponsor in a somewhat limited capacity.

Having available capital to move quickly when these situations arise is key to acquiring such assets at a discount. A number of our clients have approached us for unsecured lines of credit to position themselves for such acquisitions. The most qualified candidates are those individuals who have high recurring cash flow from their respective properties and operating businesses. Bridge loans are also integral for an applicant to move quickly to take title and demonstrate the means available to turn the assets around.

Perspective is interesting in real estate investing. The pessimist sees the glass half empty and the optimist sees it half full. The next time you hear what sounds like negative news about the economy and the real estate markets, consider the contrarian’s perspective and where opportunities might exist for your organization.

We will keep you posted…

Penstar has received an application for a 1-star mobile home park located in Southern California. The property features only single wide coaches ranging in age from the 1950’s to 1960. The asset has demonstrated historically high occupancies and is presently 100% occupied. The owner collects ground rent from the tenants but does not own any of the coaches. The application provides for a permanent loan based upon 70% loan to value, a 10 year term at a fixed interest rate of 6.20% with a 30-year amortization. The borrower will have the option to realize almost $2 million in cash-out proceeds. To discuss, please contact Gerald Price at (818) 883-9629 or Price@PenstarAdvisors.com

Penstar is working with a bank providing permanent loans for apartment, office, retail, industrial, warehouse, mobile home parks, and mini storage located throughout Southern and Central California. Loans considered will range from $1 million to $15 million and underwriting is based on a DCR of 1.15 for apartments and 1.25 for commercial properties. Pricing for the loans is 165 to 195 over the 5-year or 10-year treasury. Prepayment is flexible with the 5-year fixed at 3, 2, 1 and the 10-year fixed at 5, 4, 3, 2, 1. The bank will consider construction loans on a case by case basis. To discuss, please contact Steven Hamermesh at (818) 883-9609 or Hamer@PenstarAdvisors.com.

Helpful Humor

We at Penstar understand the challenges of the commercial real estate business. The best antidote for those challenging transactions is to take a moment to have a hearty laugh. Helpful humor is our way of infusing laughter into your work week. The anecdotes may not all be real estate themed but we hope you will enjoy them just the same.

““Yogi Berra Quotes”

“Baseball is 90% mental. The other half is physical.”
“In theory, there is no difference between theory and practice. In practice, there is.”
“A nickel ain’t worth a dime anymore.”
“I usually take a 2-hour nap from 1:00 p.m. to 4:00 p.m.”
“When you come to a fork in the road…take it.”
“The future ain’t what it used to be.”
“Here it is again for the first time.”
“It’s Déjà Vu all over again.”