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Finance for Developer in Austin, TX

Thursday, October 19, 2017
Borrower   A European land investor and syndicator.
Loan   A $7,100,000 three-year loan at 15% for the first year, and 18% thereafter.
Collateral   First mortgage liens on a 138-acre parcel and a 104-acre parcel in Austin, together with a lien on a 607-acre parcel north of the City. We also have liens on the developer's General Partnership interests in interests in 46 limited partnerships (which own more than 5,000 acres of property).
Guarantors   Two Austin-based developers who put the deal togrther for the investor and who share in the profits togrther with their operating companies guaranteed this loan.
Purpose   The loan was required in order to close on the purchase of about 410 acres from the State of Texas. If we had not closed the loan within one week the State would have been able to void the contract and sell the land to a higher bidder.
Exit strategy   The borrower planned to pay us off out of the proceeds of a syndication of the land among European investors.
Outcome   The loan was re-financed (on much more favorable terms) by a local bank and we have been repaid in full.




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