Loan Modification Case Study: Mile High Retail Financing

by Naveen Malhotra | Portfolio Management & Servicing

Banner of a blank store front over abstract art detailing a loan modification

In July 2019, we launched Mile High Retail Financing on the Yieldstreet platform. 

Investors had the opportunity to invest in a first mortgage loan secured by a retail property anchored by a full-service health and fitness club (“tenant”) in Aurora, Colorado. The offering had an expected duration of 25 months, with a target annual interest rate of 8%.

Due to COVID-19 related factors, the tenant was forced to shut down its operations temporarily. As a result, the Borrower was unable to progress with its business plan, which included securing a less expensive refinancing from a bank lender.  

Yieldstreet and the originator, iBorrow, worked with the Borrower to structure a loan modification and forbearance agreement (“modification”) to extend the loan by six months in order to provide sufficient time for the refinancing. The modification included full payment of interest due and trapped all operating cash flow through a lender-controlled account.

In October, ahead of the extended maturity date, the Borrower successfully repaid the loan in full. Despite obvious struggles in the retail sector today, especially for gyms / health clubs, 100% recovery of investor principal and outstanding interest was achieved through a negotiated workout strategy. 

Below is an overview of the workout process that achieved full recovery of investor principal and outstanding interest.

Flow chart detailing a workout process that achieved full recovery of investor principal and interest

To learn more about our due diligence process, please review our post on our loan workout process and our recovery case study on Irwindale Industrial Financing, as well as Orlando Hotel Portfolio.

As always, for any additional questions you may have regarding Yieldstreet offerings and our workout process, please reach out to us at [email protected].

Published:

11/09/2020

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