Clopton Capital is currently offering borrowers recapitalization strategies for commercial properties that are overleveraged or distressed, according to a press release from the firm.
The press release said that it would provide the borrowers the flexibility to move away from heavy debt loads that is threatening their properties.
There are a considerable amount of commercial mortgages that were originated via CMBS loans as well as other banking outlets that are now coming due, the release from the company stated. Many of these will not be able to refinance with the underlying properties value dropping since the loan was originated, making the new would-be loan's value too high. This is where a recapitalization of the capital stake becomes necessary and where Clopton comes in.
The company is offering borrowers who find themselves in these situations the chance to refinance their properties. This would be done through subordinated debt including B notes and mezzanine loans. These loans allow borrowers to have a higher LTV than is achievable via a senior piece, Clopton explained in the release.
A typical loan size for the Clopton to recapitalize would be at least $15 million. This is because they need to allow for at least a $2 million dollar subordinated loan aside from the senior loan. Typical property types include multifamily, mobile home parks, student housing, industrial, retail, hotels, and office. These assets must be performing and be located in primary and secondary markets in the U.S., the company said.
Clopton Capital offers commercial mortgages, construction loans, bridge loans, and CMBS loans to borrowers for a diverse range of property types and ownership structures.