$7.4 Million Loan Obtained for Residential Building

After years of ownership, our real estate developer client decided to move forward with the development of a parcel of land totaling approximately 40,000 square feet. The plan: to construct a 66-unit mixed-use apartment building, financed by a $7.4 million construction loan.

Reviewing the Loan Commitment

Once retained, we carefully reviewed the terms and conditions of the loan commitment. During our review, we noted that the proposed construction loan carried a higher interest rate than one recently secured by another real estate developer client of ours—with the same mortgage lender.

Negotiating a Better Interest Rate

We immediately flagged this discrepancy for our client. After bringing it to the attention of the mortgage lender, our client was successful in negotiating a reduced interest rate that better reflected prevailing terms.

Identifying Gaps and Renegotiating Terms

Beyond interest rate concerns, our review of the loan documents revealed several business terms that had not been addressed in the original loan commitment. We worked directly with the lender’s attorneys to modify these terms, ensuring that the final loan documents reflected a fair and complete agreement.

Legal Opinion and Title Protection

As part of the transaction, we were required to issue a legal opinion on both the enforceability of the construction loan and the legality of our client’s corporate structure. We also reviewed the title commitment issued by the title insurance company to confirm that our client’s interests were fully protected in the transaction.

Project Moving Forward with Construction Underway

With the loan transaction successfully closed and protections in place, our client is now actively constructing the apartment building—one step closer to delivering a significant mixed-use development in the city.