Here’s how a single transaction led to new opportunities.

Opportunity

The nine-story waterfront property in Bay Harbor Islands, Florida, consisted of 41 residences, ranging from 900 to 2,100 square feet.

The borrower was an international real estate developer wanting to establish its footprint in the United States and seeking a financial institution to provide a construction loan.

Banks had tightened their hold on construction loans, and since it was the borrower’s first project being developed in South Florida, banks were not willing to approve the financing sought. LV Lending saw an opportunity to fill that void and become the financial partner for the real estate project.

Outcomes

With 70% of the units already sold, LV Lending approved a $14 million construction loan, and the project broke ground in May 2017. Bijou Bay Harbour was completed in December 2020; by then, 20 loan draws had been disbursed. The building received its certificate of occupancy, and the borrower was able to execute the condominium closings. The loan was paid off in March 2021.

This transaction helped LV Lending identify the niche it wanted to focus on: construction loans for real estate developers. The team saw great potential to expand upon those single transactions to build long-term partnerships with real estate developers who were not able to easily close a funding solution for their real estate project.

A few months after these transactions, the LV Lending Team met managing principal Robert Suris of The Estate Companies and worked with Suris and his team to provide a $4.6 million construction loan for Soleste Alameda, a luxury multifamily rental community in Miami. Once again, banks were not approving construction loans.

Some months later, LV Lending also provided a $10 million construction loan for The Congress Group’s Shops at Landmark.

Real estate collateralized operations have always been one of the most important investment types for individuals and institutions. For these kind of operations, capital is available from various sources, including private lenders. During crisis, access to funding becomes difficult for sponsors, developers, and real estate investors; as a consequence, some deals are lost and investment stops. While traditional banking stops or delays the decision-making process, private lenders find creative and flexible financing solutions, thus contributing to the economy and its recovery during difficult times.