Strong borrower, strong collateral– the best part is the county of Tulare is essentially guaranteeing the loan as they will reimburse the borrower all construction costs AND the interest. The work has already commenced.
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https://www.dropbox.com/scl/fo/n4bpmcpyznm0n819vaz1x/AMD-vMCh5ovO1wLqT3hNrhM?rlkey=a1xa9valzwe3oazw0z66h4zq5&st=gzs06wn7&dl=0
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Drop box has the leases, payment agreement with structure, copies of the approvals, site maps, TI work progress Video.
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Here is the summary :
Investment Proposal for Tenant Improvement Construction
Property Overview
Location: 2270 E El Monte Way, Dinuba
Size: Approximately 80,000 square feet
Current Use:
50,000 square feet occupied by a large grocery store tenant.
30,000 square feet under tenant improvement (TI) expansion for the County of Tulare
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Project Summary
The project involves funding the construction of tenant improvements (TI) for the remaining 30,000 square feet of the property. The County of Tulare will be utilizing this space to consolidate three of its offices into one location, providing various social services including medical functions. This consolidation is expected to significantly increase traffic to the shopping center, enhancing its overall value and attractiveness.
The lease was signed in December of 2022. The borrower then spent the majority of 2023 working on engineering, planning, permitting . The official construction started end of 2023. The borrower has been funding the project out of his own pocket and is seeking a loan to cover the total cost of the project.
The goal is to be ready in the next 90 days for occupancy.
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Financials
Total TI Cost: $3.5 million – seeking $3.85 to cover costs for loan.
Reimbursement: The County of Tulare will reimburse the landlord 100% of the TI costs over a 7-year period, in addition to the monthly rent.
Property Valuation: Estimated at over $12 million based on comparable properties and projected rental income valuation.
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Existing Financing:
$1.7 million first mortgage secured by an SBA loan with a favorable rate of 1.5%.
The borrower aims to retain this loan due to its low interest rate.
Borrower Profile
Name: Fadhle Mohsin – Al Hassani, Inc
Background:
Established property developer and business owner in Central California with over 30 years’ experience.
Operates a chain of grocery stores, United Grocery, with over $25 million in annual revenue and Valuation of $15 Million.
Collateral and Loan Security
Additional Collateral:
Commercial properties with Tenants
Nearly 1 acre of street-facing pads at the shopping center
Equity:
Subject property Value estimated at $8 million.
Loan-to-Value Ratio: Combined loan-to-value (LTV) of 38%, considering the additional collateral and property equity. ( see REO Schedule )
Funding and Refinancing Plan
Bridge Loan Amount: $3.85 Million
Control Fund: All funds will be placed into a control fund to ensure proper allocation and usage.
Refinancing Plan: Upon project completion, the borrower will refinance the property. The County of Tulare's reimbursement plan will cover the monthly payments, providing a secure income stream for loan repayment.
Investment Potential
Investing in this project offers significant potential due to:
The strategic location and size of the property.
The addition of a high-traffic tenant like the County of Tulare.
Secure reimbursement plan from the County, ensuring cost recovery.
Strong borrower profile with substantial collateral and low LTV.
