$900K 1031 Purchase Bridge: Single-Tenant NN Retail
Indianapolis, IN: A buyer needed to close a replacement-property purchase within a 1031 exchange deadline. The closing window and limited institutional lending during COVID ruled out traditional financing. Helvetica structured a $900,000 first mortgage at 56% LTV, with a 12-month interest-only term and two 6-month extension options.
The Borrower's Problem
The buyer had identified a fully occupied, free-standing retail building as the replacement property in a 1031 exchange. A recently renewed 5-year double-net lease provided in-place income, but the exchange deadline required a faster closing than traditional financing could accommodate.
Institutional lending was also constrained during COVID. The buyer needed a bridge that could support the acquisition now, with time to arrange a permanent refinance as bank lending became more available.
The Helvetica Solution
Helvetica structured a $900,000 purchase loan secured by a first mortgage on the Indianapolis property. The loan carried a 12-month interest-only term and two 6-month extension options, providing up to 24 months of runway.
The 3,299 SF net rentable building was 100% occupied under a double-net lease, with the landlord responsible for the roof and structure. Annual rent of $115,465 supported approximately 1.3x debt-service coverage. A 5-year renewal option provided for annual rent of $125,362.
Additional security came from a second deed of trust on an occupied 4-unit rental property in Long Beach, CA. Its existing first mortgage remained in place. The planned exit was an institutional refinance within 12 months, rather than a sale of the acquired retail building.
Benefit to the Borrower
- Acquisition financing aligned with the 1031 exchange closing deadline
- A 12-month bridge to institutional financing as lending conditions improved
- Two 6-month extension options for up to 24 months in total
- Interest-only payments supported by approximately 1.3x in-place debt coverage
- Additional collateral used without replacing the rental property's existing first mortgage
Deal Highlights
- $900,000 first mortgage; reported 56% LTV
- 3,316 gross SF, including 3,299 net rentable SF; 29,185 SF site
- 100% occupancy with a recently renewed 5-year NN lease and one 5-year renewal option
- Landlord retains responsibility for roof and structure
- Additional collateral: second deed of trust on a 4-unit Long Beach rental property
- Exit strategy: refinance with an institutional lender
Facing a 1031 exchange closing deadline?
Helvetica funds bridge and 1031 exchange loans from $300K–$10M+, typically closing in 3–10 days following receipt of all requested documentation.
