Atlanta New Construction Hard Money Loan Highlights

66% Loan to Value Commercial New Construction directly on the Beltline in Atlanta, Georgia. The borrower is expanding their current business model footprint and is looking to refinance their current traditional bank loan and add some construction dollars to finish the renovation.  Ibiza Event Catering is seeking to add a full service catering/special events venue to its portfolio of services. This venue will host a variety of special events with the capacity of 200 guests. It will also service the adjacent area for take out catering orders. The subject property already offers off site catering services to many locations in the metro Atlanta area as well as out of state. By adding this new division it will generate new revenue to their current bottom line. The proposed location is 70% (6800sq feet) larger than the current business location. This increase in space will also provide capacity to take on more business and output more volume. It will also create more jobs and double our current team

About the Neighborhood

Atlanta Beltline, Atlanta’s spectacular outdoor space, comprises 22 miles of unused railroad tracks circling the core of the city’s in-town neighborhoods.  From trails and walkways to open green space and parks, the Atlanta Beltline connects people to neighborhoods, dining, and cool places throughout the city.

Why We Like This Opportunity

The borrowers have successfully run this business in Atlanta for the past 11 years.  Since 2022, the owner has put in over $350,000 into the property.  This loan is a straight refinance of their current debt as the current lender (First Horizon Bank) stopped releasing construction draws and wants this commercial property off of their books.  The owner is funding over $1MM in additional improvements/expansion to this Beltline commercial property to host events, catering, take out business and more.

The property is realistically worth $2.7MM today based on the improvements made to date and will be worth over $3MM with the latest improvements.  Yieldi is only refinancing the debt, putting us in a comfortable 66% loan to value on a local commercial property on the beltline. Yieldi is only funding 30% of the remaining work on the build out, and this will be paid in draws as the work is completed.

The sponsor is excellent with good credit as well as cash flow from their business.  The business’ financials show an EBIDTA of around $1.5MM annually.  This provides more than enough capital to cover the monthly interest payments.

The borrower’s exit strategy is to complete the work and then exit either to a conventional loan or to an SBA loan within the 15-month term of this bridge loan.

Seniority

The first-priority mortgage lien position is the most senior and highest priority within the capital structure. In the event that a borrower defaults, the lien priority determines the order in which lenders are repaid. Senior lenders are always repaid first. All subordinated positions, including the amount held by the Originator and its investor syndicate, act as a buffer in the event of a deterioration in the Properties’ value.

Personal Guarantee

The Loans are personally guaranteed by the borrower, spouse, and all principals in the LLC. Additionally, the Sponsor and/or Guarantor are obligated to contribute monthly payments to maintain a tax and insurance reserve. Failure to adhere to reserve contribution requirements would lead to the triggering of a debt service and operating expense/shortfall guarantee.