Boston, MA (PressExposure) October 30, 2009 -- Commercial Mortgage Lender, MasterPlan Capital, has announced plans to establish a waiting list of developers, commercial real estate investors and real estate syndicators who wish to be first in line for a mortgage loan once liquidity returns to the Walgreens Credit Tenant Lease (CTL) finance market.
Most institutional fixed income investors who purchase the private placement bonds that back CTL loans are at their maximum capacity of Walgreens paper making it nearly impossible for CTL lenders to fund the purchase, refinance or construction of a Walgreens outlet. CTL loans are highly sought after by owners and developers of stand-alone Walgreens stores because they offer exceptionally high leverage, as-much-as 100% loan-to-value, and long-term fixed rate, fully amortized commercial mortgages. Further, CTL financing is generally non-recourse and fund very quickly with less paperwork.
MasterPlan will pre-underwrite potential loans and, if the loans appear likely to fund, will invite the borrowers to participate in the waiting list. As soon as liquidity returns to the Walgreens CTL market MasterPlan will submit each loan in order according to the list.
A spokesperson for the firm said that the list will be an important tool because it is conceivable that only a few million dollars in Walgreens bonds could be issued at a time. In a written statement announcing the waiting list to clients and potential borrowers they noted: "If one of our funding sources, a pension fund for example, calls to inform us that they have $10,000,000.00 in Walgreens capacity that capital will be spoken for in a matter of hours. We won't have time to track down potential borrowers and prepare funding requests. When the Walgreens window opens up again it will be first come first serve."
A spot on MasterPlan's waiting list will ensure borrower's requests for Walgreens CTL money will be submitted as fast as humanly possible once it becomes available. Although the firm cautioned that a loan commitment can not be guaranteed.
To qualify for the waiting list a potential borrower must demonstrate significant experience in NNN retail investing and meet minimum net-worth and liquidity requirements. They must have an executed lease with Walgreens or be under contract to purchase a store that is NNN leased to Walgreens. A nominal deposit will be required to cover the cost of the pre-underwriting and to ensure that only serious borrowers get the valuable spots on the list. The deposit will be refundable if a loan closes but will not be returned otherwise. This policy will discourage borrowers from jumping on and off the list or from placing their names on the waiting lists of several CTL lenders.
Developers, commercial real estate investors and deal sponsors who wish to be considered for the waiting list should contact the firm at 800-727-5140.