Renegotiating terms to achieve DCR

[Michael Healy]

Hi all, Looking for some ideas. In contract on a cluster of commercial properties--sellers are also tenants who will continue as tenants after closing. They agreed to do 15% owner financing, which I requested so I can meet reserve requirement after closing. They also negotiated lower rents per sqft as part of contract and are leaving behind two office vacancies. I got word from my commercial lender that transaction doesn't meet minimum debt coverage ratio, so I went back and asked the sellers to adjust the per sqft rate back to what they're currently paying and to fill the vacancies at the current rate prior to closing. They declined. I feel I have some leverage as I don't think there's a huge line of people willing to buy this entire portfolio, but all the new remedies they proposed aren't things I can do before closing..eg flip part of the property, increase rents on other tenants, etc. Any ideas? One of the complicating matters is one of the sellers is my attorney on some other transactions. LOL. MH