SAN FRANCISCO, Calif., (May 29, 2014) – Lone Oak Fund, LLC, a private lender specializing in short term loans on commercial and residential properties, has provided financing for the acquisition and refinance of three separate hotels totaling 140 rooms in California.
“Private money lending activity is beginning to soar in the hospitality industry,” says Alexa Mizrahi of Lone Oak Fund. “Hotel owners and investors are seeking alternative finance solutions that can deliver the flexibility and speed they need to acquire and reposition hotel properties.”
Lone Oak, a mortgage fund with more than 700 high net worth members, notes that these solutions may include lender partnerships that help to increase leverage, or short-term loans that can more easily transition to conventional financing.
Lone Oak’s recent hotel transactions include:
Refinance Loan For $8.2 Million San Francisco Hotel
Lone Oak provided a $3.85 million first trust deed on an 82-room hotel situated on a 24,300 square-foot lot in the Russian Hill neighborhood of San Francisco, Calif. The 18-month loan closed at a rate of 8.3 percent.
“The borrower acquired this property in 2004, and there is an existing lease in place with an operator,” explains Mizrahi, who notes that the property is currently valued at $8.2 million.
“By providing this short-term refinance loan, we were able to help the borrower become better positioned to pay off the property’s existing liens and seek a conventional refinance while rates remain low,” says Mizrahi.
Refinance Loan for Owner-Operated 42-Room Hotel in San Francisco, Calif.
Lone Oak Fund provided a $3.4 million first trust deed on a 12,059 square-foot, 42-room hotel located in San Francisco’s Russian Hill neighborhood. The 18-month loan closed at a rate of 8.3 percent.
The borrower, who acquired the property in 1994 and is the current operator of the hotel, will use the short-term loan to ensure that all of the property’s liens are paid to prepare for a conventional refinance, according to Mizrahi.
“We will likely see an increase in short-term refinance loans over the next 12 to 24 months, as investors continue to work toward conventional refinance loans in order to take advantage of continued low rates,” says Mizrahi.
Financing For $7.14 Million Multi-Property Acquisition In Newport Beach, Calif.
Lone Oak Fund recently partnered with two other lenders to provide financing for the $7.14 million acquisition of a pool of investment properties in Newport Beach, Calif., including: a 16-room boutique hotel with ground-floor restaurant, a quadruplex, and a beachside cottage.
Lone Oak provided a $3.57 million first trust deed, at a rate of 8.3 percent interest only for a six-month term.
In addition, Lone Oak Fund sourced a junior lender that provided the second trust deed, while a third trust deed from a private equity investor rounded out the capital stack.
“By working together, we were able to provide the borrower with leverage totaling 80 percent of the acquisition cost, while keeping the blended rate extremely competitive, below ten percent,” says Mizrahi.
All three loans closed concurrently in less than two weeks, according to Lone Oak Fund.
About Lone Oak Fund
Lone Oak Fund, LLC is a private mortgage lender that provides bridge loans on commercial and residential properties throughout California.
Founded in 2003 by experienced real estate developers, Lone Oak Fund has become one of the largest private bridge lenders in California, funding approximately $2 billion to date.
The fund, which is supported by the financial strength of over700 members, is comprised of high-net-worth individuals, institutions, and pension funds. More information is available at www.loneoakfund.com.