Financing For Distressed Note Acquisitions

Manhattan Commercial Capital understands that distressed note acquisitions can be very complex and delicate transactions. In many cases the buyer must take on the responsibility of researching and compiling information such as:

  • Terms on the distressed note
  • Prior legal actions
  • Covenants
  • Type of property involved
  • Previous owners

The experts at Manhattan Commercial Capital will analyze transactions for distressed notes, in order to asses the overall profitability and help you turn a profit. We have the financial resources and depth of knowledge to handle distressed note acquisitions, so you can keep your transaction moving forward without worrying about the risks involved.

Distressed Note Financing From Manhattan Commercial Capital

Many transactions involving distressed note acquisitions are in place senior or subordinated debt. Manhattan Commercial Capital offers financing solutions for distressed note acquisitions, such as:

  • Single loans for individual transactions
  • Direct purchasing coupled with transfer of ownership
  • Non-recourse financing options
  • Customized financing for multiple distressed note acquisitions

Loan Parameters

Property Types Office, retail, industrial, multifamily, self-storage, mixed use, and mobile home parks. Hospitality considered on a deal-by-deal basis
Status Notes secured by first mortgages on existing buildings (no ground-up construction)
Quality Class A and Class B. Class C considered on a deal-by-deal basis if mitigating factors
Location Nationwide in primary and secondary markets
Borrowing Entity Single purpose entity
Collateral Initially UCC-1 collateral assignment of underlying note, converting to first mortgage once title to property is obtained
Initial Loan Amount Initial funding for individual properties typically from $1 million to $20 million.
Additional Loan Amount for CapEx Additional future funding available
Loan-to-Value Up to 70% (typical LTV is 60-65%). Stretch LTVs up to 80% considered on a deal-by-deal basis
DSCR No Minimum
Loan Term Up to 7 year loans (3-5 year terms plus extensions)
Recourse Non-recourse to key principals with standard bad act carve-outs
Origination Fee Determined by quality of property, strength of sponsor, and loan characteristics
Rate Type Fixed or floating
Interest Rate Interest-only rates competitive with bank and CMBS mortgage constants
Exit Fee Determined by quality of property, strength of sponsor, and loan characteristics
Reserves An amount as determined by borrower and lender
Prepayment Loan can be prepaid at any time. A reasonable minimum interest period aligned with each borrower’s specific business plan is typically required

Download Loan Parameters

Get Started Today

If you are handling the acquisition of one or multiple distressed notes, you need a reliable partner with the capital resources to ensure success at every step of your transaction. Manhattan Commercial Capital will work with you to provide a financing solution tailored to your needs.