$3.2M Refinance Bridge: Hanford Big-Box Retail

The Borrower's Problem

The original purchase loan was maturing while the building remained vacant. A family-entertainment franchisee had signed a 10-year absolute-net lease for 35,000 SF. A national western-wear retailer had signed a letter of intent for another 10,000 SF, not a completed lease. Both spaces required tenant improvements before the property could establish an operating history.

The signed lease called for a $595,000 landlord improvement contribution. The proposed second tenancy called for another $335,000. Conventional refinancing was the planned next step once the lease was seasoned and historical property income could be documented.

The Helvetica Solution

The $3,200,000 first-mortgage bridge was designed to pay off the maturing purchase debt and support the tenant buildout. The source specified $600,000 of loan proceeds in fund control for tenant improvements. The financing used interest-only payments while the owner worked toward occupancy and a conventional refinance.

The appraisal reported $4.64 million in vacant value, $6.87 million with the signed entertainment lease, $7.54 million with both prospective tenancies, and $9.5 million at full stabilization. These are different valuation scenarios, not evidence that the proposed second lease or full stabilization had occurred. Projected income from both tenancies was reported to cover debt service by more than 1.2x.

*The brochure cover and transaction record report a 12-month term and 46.6% LTV against the $6.87 million valuation. The narrative instead describes 18 months and approximately 50% LTV. This case study retains the cover figures as reported; the source does not establish final executed terms. The intended exit was a bank refinance after the lease was seasoned, not a reported completed refinance.

Benefit to the Borrower

• A $3.2 million bridge designed to replace maturing purchase debt
• $600,000 held in fund control to support tenant improvements
• Interest-only financing during the transition from vacancy to operating income
• Underwriting that recognized the signed 35,000 SF lease while treating the additional 10,000 SF tenancy as proposed

Deal Highlights

• $3,200,000 first-mortgage retail refinance bridge
• 77,926 SF gross leasable area on a 284,882 SF site in Hanford, CA
• Signed 10-year absolute-net lease for 35,000 SF
• Letter of intent for a second 10,000 SF tenancy
• $6.87 million appraised value under the signed-lease scenario
• 12 months and 46.6% LTV reported on the cover; narrative terms differ
• Planned exit: conventional refinance after lease seasoning and documented operating income