The Situation

The client, a large residential developer, purchased a large parcel of land in South Florida with the intention of constructing a 110-unit apartment building. The client secured an acquisition loan in excess of $4.5 million and provided an equity investment in excess of $1 million of capital.

The Challenge

At the time the client retained Real Diligence, there was over $6 million of debt on the property. The client had been desperately trying to bring in new partners and equity to provide some measure of debt relief and save the project.

The Solution

The Real Diligence team coordinated a multi-pronged strategy which involved:

• Maintaining continuous contact with the lender to educate them as to the facts on the ground
• Conducting due diligence and market analysis to effectively prove to the lender the deteriorating land value
• Developing and implementing a legal strategy to provide the client with additional leverage over the lender
• Assisting in positioning the client as the optimal solution to realize the highest and best use of the land
• Effectively putting forth all crafted arguments and handling difficult negotiations with the lender to achieve a favorable loan workout for the client

The Results

Real Diligence successfully negotiated on behalf of the client a loan reduction of $4 million for the property. With this reduction, the client was able to meet the debt service without having to secure any additional partners or equity for the project, thereby preserving the client's initial $1 million equity investment.