Real Estate Capital of America (ReCap) recently secured a $17.5M mortgage loan for one of the biggest pawnbrokers in the NYC Diamond District. The loan process was a struggle to begin with, as Johnny Su, COO of ReCap explains. “Lenders routinely do not lend to pawnbroker or pawnshop due to that industry having a bad reputation or the fear of money laundering or other illegal activities,” says SU,“so 99% of lender will not lend to pawnbrokers.”
In addition, the client’s tenants rented on a month-to-month basis or a short-term lease of less than 1 year. The tenants are concentrated in the jewelry industry and related businesses. “Those types of renters can make the building income and vacancy very difficult to project and quantify for loan underwriting,” says Su,“and since the client has owned the property for more than 10 years, lenders would not consider these properties as “in transition” so a bridge loan was out of the question.” Despite the lenders’ reluctance to work with a building with short-term lease structures, the client insisted on keeping them and said there would no change going forward.
The client specifically retained ReCap because Because ReCap has earned a reputation for its ability to handle tough loan scenarios, the ability to provide creative financing structures, and goodwill within Bukharian Jewish Community for securing construction financing for two of its synagogues in Forest Hills. He was confident that ReCap would find a lender that would understand its business as a pawnbroker and its strategy and benefit in maintaining short term leases of its tenants.
After reviewing the challenges, ReCap took on the assignment and via its strong relationship and experience in the capital market, ReCap was able to convince its lender and address and mitigate all the concerns. The loan had a fixed rate is the sub 4%.
Michael McMenamin, attorney for the client, states,“in all my years, as a real estate attorney, Su is one of the best commercial financing broker I have worked with and his persistence and creativity help make this very difficult loan possible.” He adds,“Johnny and ReCap done a fantastic job for my client.”
ReCap (recapny.com) is a prominent finance boutique assembled by distinguished experts. The professionals at ReCap assist their customers throughout the entire loan process. Their commitment to service and excellence keep customers satisfied and referring ReCap services to their colleagues. “We work hard to provide the best financing in complicated deals,” said Tomer Dicturel, CEO of ReCap. “We succeed where others fail.”