Transaction – Please contact John Weber if interested, more information can be provided. jweber@waterstreetadvisors.com – 630-201-0348
Borrower seeks a funding sponsor that will provide a loan of $5,000,000 for the purchase of LLC interest/ownership of LLC ownership of a large seasoned commercial development in the St. Louis MSA. The debt will be structured as a 5 year loan paying annual interest priced at no more than 8%. Payments to be made monthly. Principal shall be paid back in the fifth-year to coincide with the lease renewal by a major credit rated tenant, refinance of existing debt or the sale of the entire development. The loan will be collateralized by an interest lien in the 33 and 1/3 % ownership of Borrower’s portion of the minority ownership. Such that in the event of default, the funding sponsor shall have right to the ownership percentage owned by Borrower.
LLC will redeem the current equity interest in LLC held by well known investor (approximately 33 and 1/3rd%) for nominal consideration. Borrower will subscribe for newly-issued equity interests in LLC constituting 33 and 1/3rd% of the total issued and outstanding equity interests in LLC immediately following the consummation of the proposed Transaction, for a subscription price equal to the purchase price described in the Letter of Intent and following the payment ($5,000,000 paid at closing) of the subscription price to LLC, LLC would utilize the proceeds to pay down certain indebtedness due and owing by LLC to the well known investor. These transaction steps would occur separately, but contemporaneously, at the closing of the proposed Transaction.
The Seller (well known investor above) and buyer (Borrower) have agreed to a purchase price totaling $15,000,000 for the LLC interest of 33 1/3rd% of ERA. The deal is structured as a minimum $5,000,000 paid in cash at close and the balance of $10,000,000, structured as an earn-out that expires at the same time as the major credit tenant lease obligations (2025). Subsequent to this transaction, LLC will retire its minority interest of 33 and 1/3rd% and Borrower shall be provided a total 45% ownership stake in LLC. The Seller has agreed to structuring a subordinated seller note for the remainder forgoing payment until one of the following the events (i) extinguishment of the CMBS obligation (2025); (ii) sale of the property (at any time prior to 2025) or; (iii) refinance of the current debt concurrent with the major credit rated tenant lease renewal in 2025 (negotiations beginning Q1, 2024). The note will accrue interest during a five-year period and shall be subordinated.