March 31, 2020
Twain Financial is now offering property owners and their lenders an opportunity to reposition or refinance their investments by entering into sale and leaseback agreements with Twain. This new source of capital can reduce loan to value ratios and improve debt coverage with land purchase offerings of up to 30%. Because Twain’s capital offering behaves in the same way as interest-only debt with no cost of amortization, building owners may improve a property’s financial performance by reducing debt, establishing a reserve, or funding additional improvements.
In a sale/leaseback transaction, the property owner retains ownership and operational rights to their current or future improvements while making ground lease payments to Twain. This allows the property owner to receive a lump sum payment for a portion of the value of the ground and current or future improvements. This financing structure creates a leasehold estate for land lessees who are typically seeking or currently have conventional real estate financing. As this is not a new financing tool, most lenders and real estate attorneys will have some experience with leasehold mortgages.
“In the wave of uncertainty and financial distress amid the current pandemic, Twain is proud to offer a product that provides critical cash infusions to projects experiencing operational challenges,” said Will Purdy, Director of Business Development at Twain Financial Partners. “With ground lease capital, project owners can pay down debt and capitalize up to 36 months of lease payments, giving their distressed assets a path forward in today’s difficult environment.”