Loan on unimproved and unentitled land- large site with low LTV
Any ideas on where to get an $50-80m loan on land worth $200m? I thought the big banks would be a good starting point.
[{"id": "itodjq6", "text": "What land is worth 200 million?", "replies": [{"id": "itoe15x", "text": "Large parcel in California near SFO.", "replies": [], "depth": 2}], "depth": 1}, {"id": "itoefue", "text": "This is a good description of the challenges you\u2019ll face (found on loopnet)\n\nhttps://www.loopnet.com/learn/a-guide-to-the-entitlement-process-for-land-development-projects/881984971/", "replies": [{"id": "itofvoi", "text": "Thank you. I was hired as an entitlement manager by the landowner,  but they are asking for help sourcing the debt.", "replies": [{"id": "itojrpc", "text": "I\u2019m a commercial mortgage banker in Los Angeles largely doing life company financing. There are LifeCos that can structure around non-income producing land deals. I sent you a DM, we should connect.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "itofb1u", "text": "What cash flow will collateralize the asset? Banks typically don\u2019t lend on non-income producing properties.", "replies": [{"id": "itofkl4", "text": "Not a lot, unfortunately.  We may be stuck with hard money lender.", "replies": [{"id": "itog6ka", "text": "Crittenden was always a solid resource back in my capital market days for one off situations like this. It\u2019s essentially a directory that gives a quick synopsis of who is lending on what. \n\nhttps://www.crittendenonline.com/realestate.html", "replies": [{"id": "itoglfo", "text": "Great. Thank you!", "replies": [], "depth": 4}, {"id": "itok5i1", "text": "How up to date and detailed are their articles?\n\nCould be a powerful list if it\u2019s accurate. \n\nThanks for sharing!", "replies": [{"id": "itp1ie4", "text": "From what I remember it was usually timely with market sentiment/pulse. By no means an inside track and if you are active in the capital markets space probably know the lenders/equity groups already but good if you have a one-off.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "itpmsrw", "text": "I agree you will need to connect with a hard money lender.", "replies": [], "depth": 3}], "depth": 2}, {"id": "itoj80h", "text": "My sentiments exactly, if it isn't producing now whats the proforma, or is there another word for unentitled undeveloped land?", "replies": [], "depth": 2}, {"id": "itr55t7", "text": "Some will include an interest reserve deducted from loan proceeds or make the borrower fund the reserve with cash", "replies": [], "depth": 2}], "depth": 1}, {"id": "itogqly", "text": "Debt fund is probably your best bet, however the debt markets are very tough right now, spreads have widened and there seems to be a larger aversion to risk.\n\nAnd you're probably not going to love the terms but still probably cheaper than your equity on unentitled land.", "replies": [{"id": "itohmny", "text": "Thanks. I will check it out. Was thinking about trying to syndicate the debt to some of my other HNW clients.  Target 9-10% return plus fees.", "replies": [{"id": "itprngj", "text": "Have you raised anything recently? I\u2019m not sure 9% return is appealing.", "replies": [{"id": "its8i1t", "text": "Agree - I'm getting a 13 + SOFR and 2 pts for a subordinated piece (45-50% tranche) of a year long bridge loan on an entitled development (I'll take that return all day).", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "itogyy0", "text": "I was part of the bankruptcy proceedings against the Kyle Canyon development outside of Las Vegas. In 2008, it was the largest foreclosure in US History at $1 Billion.  The owners were all the national developers like Pulte Homes et al.  Who could the bank sell this planned town to besides them? Nobody.  I can't remember what they settled for exactly, but it was like $200MM. $800MM POOF.  Bank of America was the lender and they ceased lending on subdivisions after that case. They still don't lend on subdivisions.  \n\nYou can see the development on Google Maps to this day, in the same state it was in 2008.", "replies": [], "depth": 1}, {"id": "itoko6f", "text": "No lender will touch it unless it is entitled. You\u2019ll have to get it under contract at least a year DD to make sure you can entitle it you will have to make it contingent upon plat approval.", "replies": [], "depth": 1}, {"id": "itp8pyx", "text": "You should not be asking Reddit, hire a debt broker. Money well spent, you\u2019ll will get taken behind a shed in todays market.", "replies": [], "depth": 1}, {"id": "itpdeok", "text": "What makes it worth $200m?", "replies": [{"id": "itprpc3", "text": "Location", "replies": [], "depth": 2}], "depth": 1}, {"id": "itpy5le", "text": "My bank lends on land that is entitled and part of a development plan. I\u2019m working on one now that will serve as the first phase of a larger life sciences campus, We ask for a 25-50bps exit fee which can be waived if we do the construction loan for the development. If it\u2019s not entitled then we really would not touch it", "replies": [], "depth": 1}, {"id": "itqigku", "text": "Lol asking this on Reddit wtf?", "replies": [{"id": "itsnsr5", "text": "Yeah, isn\u2019t anonymous posting amazing?  This post has led to 2 alternatives that hadn\u2019t been considered vs. just calling a broker. \n\nIt\u2019s amusing to me when people can\u2019t wrap their head around successful or rich people looking for solutions outside of traditional means and methods. Think about it and enjoy your box.", "replies": [], "depth": 2}], "depth": 1}, {"id": "itrmhjq", "text": "Might find a lender here [capitalrecon.com](https://capitalrecon.com)", "replies": [], "depth": 1}, {"id": "itsapja", "text": "Try credit unions. They do land loans.", "replies": [], "depth": 1}, {"id": "itsywq2", "text": "I work at a PE fund that does debt equity. If you PM me, I can take a look at it and see if it\u2019s something we\u2019d lend on", "replies": [], "depth": 1}]