MasterPlan Capital Sharpens Focus in 2012; CTL Lending, Bridge Loans and Mortgages on Income Producing Commercial Property to be Emphasized

January 3, 2012
Greenwich CT

FOR IMMEDIATE RELEASE:

MasterPlan Capital Sharpens Focus in 2012

Commercial real estate investment banking firm, MasterPlan Capital, has disclosed its 2012 business strategy. In a written statement to clients, employees and investors the firm noted that it will concentrate its efforts on credit tenant lease finance, private bridge lending and commercial mortgage lending against income producing commercial real estate. MasterPlan will deemphasize it’s participation in joint ventures and other forms of equity finance and will not consider land or development loans except for triple net leased projects or for existing clients of the firm.

Regarding credit tenant lease (CTL) loans for triple net leased (NNN), single tenant assets the statement read, in part:

“CTL finance has been one of the healthiest sectors of commercial real estate finance and promises to remain to be strong well into the future. Net lease investors have realized that locking in today’s low rates for the long term is a smart business move. CTL offers them a fixed rate, fully amortized, non-recourse commercial mortgage with terms (coterminous with the lease) to 30 years. MasterPlan Capital can provide these income investors with the absolute lowest rates in the industry and can offer them a very high degree of certainty of execution. In-short, no CTL banker is more competitive in pricing or dependable in closing deals.”

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The firm also commented on private bridge lending:

“As the economy slowly improves more competitors are entering the short-term, bridge loan space. We intend to compete aggressively for the best deals without subjecting our investors to undue risk. That-is-to-say, in certain instances we might lower our lending rates but won’t increase our loan-to-value (LTV) ratios, won’t offer non-recourse bridge loans and won’t do deals for the sake of doing deals.”

The statement noted that the firm intends to continue originating commercial mortgage loans against income producing commercial real estate:

“Income producing commercial real estate mortgage loans such-as loans against multi-family assets, leased up office properties and light industrial buildings will continue to be a bread-and-butter, activity for the firm.”

The firm went on to explain why it is moving away from joint ventures, equity finance and land and development loans:

“Other forms of structured finance such as joint ventures and equity finance offer the potential for high returns to our company but are very taxing on the time and workload of our people and our third party service providers. We have determined that our valuable time is better spent on our core businesses. As-for lending against land and for construction and development, we will continue making these types of loans against unimproved real estate that is net leased to a single investment grade tenant and for existing clients of our firm but otherwise will no longer be accepting applications for land loans.”

About MasterPlan Capital LLC:

MasterPlan Capital is dynamic, privately held commercial real estate investment banking firm offering credit tenant lease (CTL) loans, commercial mortgage loans and asset management services to commercial real estate investors and owners in the lower 48 states. Clients and prospective borrowers can apply for financing at the firms web site (http://www.masterplancapital.com)  or by calling 1-800-727-5140.

Money Available for Walgreens Credit Tenant Lease (CTL) Loans – Special Low Rates for Loans against Portfolios (3+ Locations, $15MM+ Loan Balance)

Commercial real estate investment banking firm, MasterPlan Capital LLC is actively seeking to fund credit tenant lease (CTL) loans against stand alone, net leased, Walgreens stores. The firm has significant but limited liquidity for Walgreens loans and specifically is looking to make loans of $15MM or more against portfolios of 3 or more Walgreens locations that can be cross collateralized. Sponsors, owners, developers and investors can inquire or apply for CTL financing online or may call 800-727-5140 xtn 1.

Loan:                 First Position Commercial Mortgage
Recourse:          Nonrecourse
Type:                  Fixed Rate, Full/Self Amortizing
Rate:                   Interpolated US Treasury Rate + Margin
Minimum:         $3MM (prefer $15MM+)
LTV:                    To 100% (subject to DSCR)
DSCR:                  1x-1.05x 
Term:                   Co-Terminus with Lease
Assumable:         Yes
Time to Close:      45-60 Days
Funding:                Private Placement Bonds

Financing is Available for Walgreens Portfolios – Capital for Credit Tenant Lease (CTL) Loans against Multiple Walgreens Locations – Special Pricing (Low Rates) for 3+ Stores, $15MM+ Loans

Commercial real estate investment banking firm, MasterPlan Capital, has a significant, but limited amount of capital available to fund credit tenant lease (CTL) loans for the purchase, refinance and construction of multiple Walgreens stores.

Sponsors with 3 or more Walgreens locations ($15MM+) who are willing to cross collateralize the properties will find current interest rates extremely attractive.

The firm notes that Walgreens financing remains tentative, due to over saturation of Walgreens debt in investors portfolios, but is available as-of right now.

Property owners, builders and investors can apply for a CTL loan on line or can call 800-727-5140 xtn # 1 for a phone consultation.

Walgreens Beats Profit Estimates – Shares Rally

Via Proactiveinvestors :

Despite an inventory write-down and restructuring costs, Walgreen’s (NYSE:WAG) first quarter beat analyst estimates as gross margins increased. 

First quarter profit for the drug store chain increased nearly 19% year-over-year to $580 million, or 62 cents per diluted share. Restructuring costs related to the company’s affected its bottom line by about 3 cents per diluted share. 

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For the quarter ended November 30, total sales increased 6% year-over-year to $17.3 billion while same store sales edged up by 0.8%.  Prescription sales, which makes up about 66% of sales for the quarter, climbed 5.3% overall and 0.9% at stores opened for at least a year.  

The results trumped analyst estimates of a profit of 54 cents on revenues of $17.30 billion. 

“Our performance was driven by our continued focus on gross profit margins, cost control and the strategic slowing of our new store openings. As a result of improved merchandising, including promotions and pricing, we saw significant increases in gross profit margins in the front end, “said Greg Wasson, CEO of Walgreens.

Gross margins increased 80 basis points compared to the year-ago period to 28.5%.

During the quarter, Walgreens provided about 5.6 million flu shots, making it the largest flu shot provider in the U.S. beside the federal government.  But the number was less than expected, prompting the firm to take a 2 cents per diluted share inventory write-down.

During the quarter, the company opened or acquired about 121 new drugstores. 

Looking ahead, the company cautioned that “persistent high unemployment makes this a challenging retail environment during the holiday season”.  Christmas sales and the flu season are often key drivers for the company’s second quarter results.

As of 12:58 pm EST, the company’s shares have rallied 7% to trade at $39.49.

Walgreens Buys The Broughton Street Medicine Mart

A longtime Orangeburg franchised pharmacy has been sold to a national drug store chain.

The Broughton Street Medicine Mart was sold to Walgreens Dec. 11.

Former Medicine Mart owner Pat Wooten said Walgreens approached him in the summer and made him an offer he could not refuse.

“I had debated it a good while and thought it was time,” Wooten said. “I am not getting any younger.”

Wooten is now serving as a pharmacist at the Walgreens on the corner of Broughton Street and John C. Calhoun Drive.

Wooten said he enjoyed having his own store but said Walgreens reputation is stellar.

“From a business standpoint it was the right thing to do,” Wooten said, noting that financially the Medicine Mart was ‘holding its own.’

But with uncertainty in healthcare reform and the third-party payment system, Wooten said he thought it was time to try something new.

“It was not like my ship was sinking,” he said. – READ THE REST HERE –

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Credit Tenant Lease (CTL) Lending is Alive and Well

Why Credit Tenant Lease (CTL) Loans Are Closing While Other Financing Is Stalled
By Vincent Remealto, MasterPlan Capital LLC

In today’s volatile commercial real estate lending environment, people want to know what’s working and what’s not.

While there is an ongoing liquidity crisis for land loans and most development projects, we are seeing some loosening in funding for income producing commercial buildings with cash flow that covers the debt service. In particular, one bright spot has been credit tenant lease financing or CTL lending.

CTL loans are a unique kind of commercial mortgage that is designed to finance commercial real estate that is triple net leased (NNN) on a long-term basis to an investment grade tenant. CTL financing is a highly specialized type of commercial real estate investment banking and is generally not offered by typical banks or brokers.

The CTL segment of the real estate finance industry is relatively healthy compared to traditional commercial mortgage lending. In-fact, once CTL term sheet is drawn up and agreed, to it is exceedingly rare that a banker fails to fund the loan and close the deal.

There are several important reasons that CTL loans are closing at a brisk pace while other loans are being rejected or never reaching the closing table.

Unlike standard commercial mortgages, CTL loans are non-recourse loans that are primarily backed by the terms of the lease and the strength of the tenant rather than the financial wherewithal of the borrower and the intrinsic value of the real estate. In-short, if the lease and the tenant pass muster, the loan will close.

CTL loans can be originated with up-to a 100% loan-to-value (LTV) ratio that is subject to a very small debt-service-coverage ratio of about 1.01. These relaxed ratios make it easier for cash strapped investors to come up with the cash necessary to get a deal done.

Also, CTL loans are funded by the investment bank issuing and selling corporate bonds in the private placement market. The investment grade bond market has remained remarkably strong throughout this recession and funding loans in this manner is much easier than trying to pry money away from a bank or an insurance company.

Because CTL loans are only written against buildings NNN leased to strong tenants, it is much easier to get purchase, refinance and even construction & development loans funded and closed. All that is necessary is an investment grade tenant, such-as Walgreens, Wal-Mart, Target, or the US Government and a triple net lease that spans at-least 10 years.

This debt crisis and the corresponding recession have been painful for everyone especially for real estate investors in-need of dependable financing. The pain continues in many sectors but credit tenant lease financing remains strong and reliable.

The author Vincent Remealto, is an analyst for MasterPlan Capital LLC.  About MasterPlan Capital: MasterPlan Capital LLC is a dynamic, privately held commercial real estate investment banking firm offering commercial mortgage loans, credit tenant lease (CTL) financing and other services to commercial real estate investors in the lower 48 states. Clients can apply for a commercial mortgage online. All inquires will receive prompt, professional service.

Walgreens Credit Tenant Lease (CTL) Lending Back-on-Track

Late last year I reported that credit tenant lease financing for Walgreens stores was becoming increasingly hard to find. The shortage was not because Walgreens was not credit worthy nor was it due to the credit crunch that has gripped the banking industry for the last 20 months. Walgreens CTL loans were unavailable due to their extreme popularity and incredible demand.

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CTL loans are funded by investment bankers who issue private placement mortgage backed bonds and sell them to fixed income investors. The investors, mostly insurance companies, endowments and retirement funds, had purchased so many Walgreens bonds that they were full to capacity and could not take on anymore Walgreens debt. At the time I described Walgreens as a “victim of its own success”.

Well I’m happy to report that, for now, CTL lenders are once again lending against new and existing Walgreens stores as-well-as Walgreens development projects.

Followers of WAG know that the drug store chain has drastically curtailed their expansion plans. This slowdown in new store openings has in-turn, reduced the demand for new Walgreens mortgage bonds and has helped alleviate the CTL logjam that was preventing banks from underwriting WAG deals.

The stock market recovery has also contributed to the new-found liquidity in Walgreens mortgage debt. As the market grows so-to does the portfolios of the investors who buy WAG paper. The corresponding increase in the value of their portfolios has mitigated the problem of being overweight WAG bonds allowing them back into the market.

Also Walgreens bond buyers have raised their interest rate requirements slightly to account for the additional risk to their funds. This small risk premium is not due to a credit problem with Walgreens, but is derived from the disproportionately large Walgreens positions they hold.

So the combination of the slowdown in the Walgreens expansion, the rising stock market and a modest interest rate hike, have made Walgreens CTL lending possible again. This is truly good news for commercial real estate investors and bankers alike, but I’d recommend that those looking to finance a Walgreens purchase, refinance or construction project strike while the iron is hot. CTL financing is dependable, long-term, high leverage, non-recourse financing, but, as we saw during the last quarter of last year, Walgreens CTL loans can be discontinued without notice.

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Commercial Mortgage Lender; MasterPlan Capital LLC – Commercial Mortgage Loans from $1mm+, CTL loans against NNN leased properties from $3mm+. Apply for a commercial mortgage online.