When the client first approached AIG LLC to aid in the funding of his project, he had already been turned down by well over ten lenders. The particular issue in this case was the high loan to cost. The goal of this loan was to pay off debt, contractor liens, and pre fund the construction reserve needed to complete the renovation of the warehouse into apartments and retail.
To solve this LTC issue our investor was able to do the following: First they allowed the borrower to base their loan amount on the as-improved value, not the as-is value. Additionally, they were able to pre fund a portion of the historical tax credits that were going to be implemented 6-12 months after closing.
The sponsor was able to trigger this ever important "first domino" which is ultimately the first of a four phase $70,000,000 project redevelopment plan.