$3.7M Cash-Out Bridge: Flex/Industrial Building with a New NNN Lease
San Diego, CA — A foreign-national owner of nearly 20 years faced a maturing bank loan on a Sorrento Mesa flex/industrial building that had sat vacant while he landed a new five-year absolute-NNN tenant. With no trailing operating history, conventional lenders wouldn't refinance. Helvetica funded a $3,700,000 first mortgage at 56.5% LTV, interest-only for 12 months — retiring the maturing loan and funding tenant improvements so the lease could commence.
The Borrower's Problem
The borrower had owned the building since it was built and held it through a two-year vacancy, during which the property produced little to no cash flow. His existing conventional loan was maturing, and he had just signed a new five-year absolute-NNN lease with a credit-worthy operating tenant — but the tenant couldn't take occupancy until roughly $548,000 of tenant improvements were completed.
Two things put a conventional refinance out of reach: no historical operating income to underwrite, and a foreign-national sponsor with limited U.S. credit history despite substantial assets and a clean, decades-long payment record on the property. The maturity date, however, did not move.
The Helvetica Solution
Helvetica underwrote the signed lease and the collateral rather than the trailing financials. A $3,700,000 first mortgage was sized at 56.5% of a $6,650,000 market value — low leverage against a well-maintained, functional asset in one of San Diego's strongest flex submarkets. The structure was interest-only over 12 months, with proceeds retiring the maturing bank debt and releasing cash to complete the tenant improvements.
The new lease carried in-place rent producing debt coverage of roughly 1.34x once commenced, and as an absolute-NNN lease the tenant carried taxes, insurance, maintenance, and utilities — a clean profile for the conventional takeout the borrower was aiming at.
Benefit to the Borrower
- Maturing bank loan retired on schedule — no default, no forced sale
- Approved as a foreign national with limited U.S. credit history
- Underwritten on the signed NNN lease instead of two years of vacancy
- Cash-out proceeds funded the tenant improvements that triggered occupancy
- Low 56.5% leverage preserved equity in a $6.65M asset
- 12 months to season the lease and refinance into conventional bank debt
Deal Highlights
- First mortgage, 56.5% LTV against a $6,650,000 value
- 29,706 SF two-story flex/industrial building on 38,768 SF lot
- New 5-year absolute-NNN lease with one 5-year extension option
- Debt coverage of approximately 1.34x on in-place rent
- Sorrento Mesa submarket: falling vacancy, rising NNN asking rents
- Exit: seasoned lease, then conventional bank refinance
Loan maturing before your lease seasons?
Helvetica funds bridge and cash-out loans from $300K–$10M+ on investment and business-purpose real estate, typically closing in 3–10 days following receipt of all requested documentation.
