Commercial Property Nonrecourse Lenders Help

[Tyler HOOD]

Hey guys, I am interested in trying to find a lender for a couple established commercial properties. We have owned the properties for the better part of 2 decades and I am trying pull some built up equity out and redeploy in a different area. The catch is, I am trying to do the deal in Nonrecourse or In Rem loans.

I have exhausted most of my normal banking contacts. They are mostly regional or statewide banks. They just don't touch nonrecourse at all. These are hospitality businesses that have very consistent revenue over the last decade and I am trying to get in the ballpark of 50% LTV.

Any ideas on lenders that might be interested?

Thanks!

[Joel Owens]

Where I have seen it come into play is say borrowers worth 30,40 50 million and they keep buying properties. They own say 10 retail centers but do not want to have full recourse of tens of millions in debt hanging over their head. Instead they want non-recourse with limited spring back clauses and have control over what happens in that situation.

It can also be helpful renegotiating a workout on a loan if the property is having an issue when the lender only has recourse of the property and not the borrower in most situations. If the property goes bad then the investor can usually make up the loss within 6 months to 1 year with his other cash flow off of the other investments.

Now there comes a point where LTV is so low that chance of borrower walking away is slim to none as they do not want to lose that large down payment. So if a buyer knows that they will fight at all costs to keep the property doing well then taking on non-recourse terms that might not be as good as recourse might not make sense. It's all situational and the personal comfort level of the borrower and how they view debt and recourse provisions.