PILOT originated a $10.0 MM first mortgage acquisition loan (the “Loan”) secured by four parcels of land located in the Lower East Side submarket of New York, NY (the “Property”). The borrower had posted a significant hard money deposit and was assembling the parcels from two different sources: (a) a bankruptcy sale, and (b) a contract flip. Due to time constraints imposed by the purchase contract and the bankruptcy sale process, the Borrower required fast and certain execution. PILOT was able to accommodate these requirements due to its ability to quickly underwrite the deal and fund the Loan in less than two weeks.
RESULT: The borrower completed design and development work and repaid the Loan in 11 months from construction loan proceeds.
PILOT originated a $6.5 MM first mortgage acquisition loan (the “Loan”) secured by six (6) parcels of land located in Park Slope, Brooklyn (the “Property”). The borrower was hard with a deposit and was assembling the parcels from multiple sources. In addition, a seventh parcel, not yet under contract by the borrower, was integral to the proposed development. Tight time constraints required the borrower to move quickly and needed the same from a lender. Pilot was able to underwrite and fund rapidly, accommodating the requirements of the borrower. The Property is intended to be used for the development of a 79,000 square foot, 12-story residential rental apartment building.
RESULT: The borrower completed design and predevelopment work and repaid the Loan in 14 months from proceeds from the sale of the Property.
PILOT originated a $3.5 MM first mortgage loan (the “Loan”) secured by a full service resort located on Florida’s west coast (the “Property”). The Property, historically successful, was over-leveraged before the recession and, as a result of degrading operating fundamentals, was operating at a loss and taken back as REO by its lender. In addition, the Property was in a state of disrepair, requiring major capital and operating improvements in order to return to profitability. The borrower purchased the Property with cash at an 84% discount to the prior owner’s basis and was seeking a loan to fund renovation costs. PILOT, seeing the future value of, and the borrower's commitment to, the Property, despite its position and condition, verbally committed to funding the Loan prior to the borrower's acquisition and upheld its commitment, closing the loan one week after acquisition.
RESULT: The borrower successfully executed the renovation and repositioning and repaid the Loan 15 months.
PILOT originated a $4.5MM first mortgage loan (the "Loan") used to fund the discounted payoff (DPO) of a note (the "Note") secured by 18 condominium units (the "Collateral Units") located in a multi-phase condominium development on the east coast of Florida. The borrower, a well-known real estate opportunity fund with limited remaining liquidity to invest in the acquisition of the Note, required capital and discretion. Due to the economic downturn and restrictive loan covenants of the Note, the borrower was unable to sell the Collateral Units at market clearing prices. The borrower’s business plan entailed using the Loan to execute a DPO and undertake an aggressive marketing initiative to dispose of the Collateral Units at market clearing prices under the Pilot Loan.
RESULT: The borrower successfully implemented its business plan and repaid the Loan 8 months.
PILOT originated a $6.0 MM loan (the “Loan”) to a Michigan-based student housing developer and its pension fund partner to fund construction of a 144-bed student housing asset 5 blocks from the University of Michigan, Ann Arbor campus (the “Property”). Even with healthy University enrollment to support housing (~42,000 students) and a strong property location, the borrower unable to obtain financing from local or regional banks due to a tight lending environment. PILOT was able to consider the value of the collateral and the capabilities of the borrower and finance this successful project through a period of credit markets dislocation.
RESULT: The borrower completed construction and lease up and repaid the Loan in 19 months.
PILOT originated a $6.0MM corporate-level bridge loan (the “Loan”) to a New York City-based real estate opportunity fund (the “Fund”), to finance working capital, pay down debt obligations, and generate liquidity for one of its funds. The Loan was guaranteed by the Fund and secured by equity interests in two 1st mortgage positions held by the Fund. PILOT's certainty of execution and discretion were paramount to this transaction.
RESULT: The loan was paid off in less than two years leading to a successful result for both parties involved.
PILOT originated 2 separate corporate-level bridge loans totaling $6.5 MM (the “Loans”) to a national student housing operator to resolve near term liquidity obligations and provide corporate working capital for its 16-asset, 3,000-bed student housing portfolio. The loans were secured by (a) a preferred equity interest in the portfolio's most valuable asset (b) a corporate-level repayment guaranty by the operator, and (c) a personal guaranty by the operator’s CEO and Owner.
RESULT: Because of the additional liquidity, the borrower was able to stabilize and refinance properties in its portfolio and repay the Loan in 14 months.
PILOT made a $15.0 MM preferred equity investment in the ownership of the remaining 37 of an initial 241 condominium units located in a trophy, 30-story, 1924-landmark building in Chicago, IL. The proceeds of the PILOT investment were used to execute a discounted payoff of a defaulted senior loan and provide working capital to the developer. The developer had completed the office-to-condo conversion and sold 84% of the units prior to the economic downturn. When sales stalled, he was unable to sell the remaining 37 units at market clearing prices due to existing lender covenants. The PILOT investment gave the developer time and reset his basis at a level such that the units could be marketed at rational prices.
RESULT: PILOT successfully completed construction and sellout of all remaining condominium units within 7 months.
PILOT purchased a defaulted first mortgage loan (the "Loan" or the "Note") in foreclosure at a significant discount to par, secured by a 38-unit multifamily building located in Chicago, IL. PILOT structured an A/B transaction with the seller who participated in repayment proceeds above a specified hurdle. Overall, PILOT believed that the asset was operationally stable but overleveraged, and had a value cushion above its basis. PILOT's creativity, flexibility, and ability to transact quickly enabled the Note to be acquired below its true market value.
RESULT: PILOT negotiated a DPO with the borrower and successfully exited the transaction within three months.
PILOT originated a six-month call option against a stalled development project located in Brooklyn, NY (the “Property”). The Property was being sold as REO by the former lender who took ownership of the property via foreclosure. Construction had been stalled for approximately five years. A prospective purchaser in contract to purchase the Property required funds to close within one week. Due to the short timeframe and without an opportunity to perform in-depth due diligence, PILOT purchased the Property and sold the prospective purchaser a six month repurchase option. Within the required timeframe, PILOT assumed the purchase contract, closed on the Property, and the repurchase option to the prospective purchaser. PILOT's creativity in structuring this transaction mitigated the risk of operating within a compressed timeframe and gave the optionee economics similar to a debt transaction.
RESULT: The optionee was able to recapitalize the Property with bank debt and exercise its purchase option within 7 months.
PILOT joint-ventured with the seller of three contiguous buildings, comprising 18,000 sellable SF, located in the South Street Seaport District of Manhattan, NY (the “Property”). The Property had been vacant for several years, had numerous building violations, and required a complete gut renovation after years of deferred maintenance. PILOT recognized the gap between the long term economic value of the asset and its short term market value given (1) a use change to residential from office, (2) the distressed nature of the transaction, (3) the physical condition of the asset, (4) the uncertainty of the Landmarks approval process, and (5) a rapidly improving residential submarket. In a short period of time, PILOT was able to structure a joint venture that gave the seller the proceeds it needed to fulfill short term funding obligations while also granting the seller a carried interest in the profits of the venture.
RESULT: PILOT completed design and predevelopment work, including obtaining Landmarks Preservation Commission approval, and sold the site with approved plans within 13 months.
PILOT purchased a 9,500 GSF 3-story warehouse and neighboring vacant corner lot in the South Williamsburg neighborhood of Brooklyn, NY. In order to deliver the building vacant, the seller was obligated to fund a tenant buyout but lacked the cash to do so. PILOT was able to lend the seller the buyout funds in the form of a loan, which amount would be credited to PILOT upon acquisition. PILOT worked through both environmental and tenant issues, closed on the acquisition, and is developing a 20+ unit residential and retail project in this rapidly-appreciating section of Brooklyn,located just a few blocks from the East River waterfront and the proposed Domino Sugar Factory development.
PILOT purchased a vacant 8,150 gross square foot Landmarked building in a prime location on Prospect Park West in the Park Slope neighborhood of Brooklyn, NY (the “Property”). PILOT had previously unsuccessfully bid on the Property in an earlier round of marketing but had the opportunity acquire the asset subsequently, as the previous contract holder could not perform. The plan for the building was to renovate/redevelop the Property into a 5 unit condominium building with each unit having outdoor space.
PILOT purchased an existing 7,510 gross square foot, 4-story, single-tenant building in the Clinton/Hell’s Kitchen neighborhood (the "Property") from a seller who occupied the entire building and was relocating its operations to New Jersey. The terms of the purchase included a leaseback of the Property to the Seller for an additional seven (7) months post-closing. With air rights available as-of-right to the Property, the site comprises a potential maximum gross floor area of approximately 12,000 SF. PILOT is converting the building from commercial to residential use, adding additional floors, and developing a 7-story, 6-unit high-end boutique condo development.
PILOT purchased the fee-interest in two adjacent parcels of land located in Fort Greene, Brooklyn (the “Property”). The Property is a corner 25x100 lot that is treated as one tax lot. The business plan includes subdividing the lot into two lots, upon which two fee simple townhomes can be built. The townhomes will each consist of 5 bedrooms, three full and two half bathrooms, and together comprise a total of 6,650 rentable square feet. Fort Greene is a designated Historic District, and as such, PILOT has received design approval from the New York City Landmarks Preservation Commission (LPC) and is developing a project that blends with the historic brownstone fabric of the neighborhood.
PILOT purchased a 3,450 GSF, 100% occupied, single-story retail building in the Boreum Hill section of Brooklyn (the “Property”). As-of-right, the 61’ x 65’ corner Property can be developed to a maximum floor area (FAR) of 15,785 SF ($162/FAR SF). PILOT, with a JV partner, worked with Seller to procure estoppels and extend the retail leases through the end of 2014 while procuring development approvals. Current tenant operating income of $80M/year yields 3% on total current capitalization, helping to offset carrying costs during the assemblage and approval process. In addition, PILOT is purchasing 4,043 SF of neighboring air rights for $324,000 ($80/SF), resulting in a total development site of 19,828 FAR SF ($145/FAR SF). PILOT plans to develop a 23-unit residential building with 1st floor retail at a total development cost of $11.0MM ($553/FAR SF).
PILOT acquired a 33-unit, partially completed, stalled condo conversion (the "Property") in Chicago, IL through a short sale. The building was structurally sound and required capital to complete construction. PILOT's business plan entailed completing construction, leasing the units, and operating building as a rental property. The existing lender required execution within one week and PILOT was able to meet this requirement, closing on the acquisition in a few days.
RESULT: PILOT successfully completed construction, stabilized the building, and sold the Property in less than 20 months from acquisition.
PILOT purchased 7 out of 8 condominium units (the "Property") through a short sale, in a partially completed condo conversion located in an affluent northern suburb of Chicago, IL. PILOT's business plan included completing construction, potentially buying the last remaining condominium unit, and leasing the units. Through PILOT's extensive network, it was able to source this off-market transaction at such a basis as to generate above market yields.
RESULT: PILOT completed construction and leaseup and successfully sold the Property less than 27 months after acquisition
PILOT acquired the top two penthouse floors (the "Property") in an existing condominium development in a prime location in Chicago. At the time of acquisition, the penthouses, with views of the Chicago skyline, were in a raw condition, left by the original developer since the property was constructed in 2003. PILOT's business plan included designing and building out the new penthouse units, then reevaluating whether to hold the Property as a rental or sell individually as condominium units. This acquisition is a prime example of PILOT's ability to recognize value and to consummate a transaction.
PILOT entered an option contract to acquire the fee interest in a multifamily zoned lot in Naples, FL (the “Property”). The infill Property was situated in an affluent neighborhood of Naples and located approximately four blocks from the beach and one block from “Main” street. Between the time of the option contract execution and exercising the option, PILOT reduced the risk of the transaction and increased the value of the Property by securing a rezoning of the lot, subdividing the lot, drafting plans, obtaining necessary permits and approvals required to construct four fee simple single family homes, procured construction financing, and vacated the Property's existing structure.
RESULT: PILOT completed the phased, four-home construction development in 25 months, selling all units at or above asking prices.
PILOT acquired a 32 acre, 223 unit/682 bed off-campus student housing asset (the “Property”) adjacent to a 10,500-student, 4-year university in North Carolina through a short sale. At closing, the Property was 52% occupied, generally due to poor property management and capital investment at the Property. As a result, the asset's market value was well below its long term economic value.
RESULT: PILOT streamlined operations, repositioned the Property, significantly increased NOI, and sold the Property in less than 3 years after acquisition.
PILOT acquired a distressed, 58% occupied, 6-property, 360,000 SF, warehouse/flex portfolio in Fort Myers, FL (the “Portfolio), as part of a programmatic joint venture with a sponsor and a best-in-class property manager. PILOT’s business plan entailed completing a programmatic capital improvement and lease-up program, and stabilizing the Portfolio through decreasing vacancy and elevating the credit profile of its tenants. PILOT continues to actively acquire well-located assets and implement a controlled leasing strategy.
PILOT acquired a 33-unit, 60% complete, stalled condo conversion in Chicago, IL through a short sale. The building was structurally sound and required capital to complete construction. PILOT's business plan entailed completing construction, stabilizing the building as a rental property, and reevaluating whether to refinance and hold or to sell.
PILOT invested with a sponsor to purchase an undermanaged 266‐key oceanfront resort and conference center in North Falmouth, MA along the southwestern coast line of Cape Cod. Property level revenue had suffered significantly through the economic downturn and the value-added transaction offered significant upside through (1) major capital improvements, (2) a new and experienced management team, and (3) strategic operational improvements. PILOT's flexibility and ability to understand a range of asset classes, including seasonal resorts, helped the sponsor meet its co-investment commitment and take advantage of an opportunity.
PILOT invested sponsor equity with a Chicago-based apartment operator to purchase a 660 unit multifamily Property in a western suburb of Chicago. PILOT's capital and rapid execution enabled the sponsor to complete the transaction under strict time constraints after a previous investor failed to fulfill its commitment. Closing the transaction included purchasing the defaulted senior loan secured by the Property, executing a discounted payoff of the mezzanine loan, and taking title to the property through a deed-in-lieu of foreclosure. The subject property was well-located and severely undermanaged but presented the opportunity to reposition the asset through an intensive capital improvements program coupled with an overhaul of its operations at rent levels that were below market.
RESULT: The venture completed a major capital program and stabilized leasing and operations within 18 months of acquisition. Operating at NOI levels approximately 70% higher than that prior to acquisition, the Property was successfully sold within three years under very favorable market conditions.