Dealmaker: Pembrook Provides $33M Fractured Condo Financing Package

Pembrook Capital Management LLC, New York, closed a $33 million financing package for 189 units at Cobblestone on the Lakes, a fractured condominium complex in Ft. Myers, Fla.

The acquisition financing included a $24.9 million first mortgage bridge loan and an $8.1 million preferred equity investment.

Commercial Observer reported Cobblestone on the Lakes came to market at a difficult time in 2007 and the original lender withdrew construction funding before project completion, leaving 42 the 290 units needing “extensive” work. “The bank foreclosed, selling the property to a series of secondhand buyers who tried to salvage the unsold condo units by renting them to any comers,” CO said.

Sponsor ESG Kullen, New York, is active in the distressed and value-add multifamily investment space. Some of Pembrook’s financing completed the acquisition, giving ESG Kullen majority ownership of the complex. The remainder of Pembrook’s commitment will support ESG Kullen’s business plan, which focuses on selling 40 existing vacant units, completing the 42 partially constructed units and acquiring additional units as they become available.

“One of the opportunities for private lenders today is to provide financing solutions for residential condominiums,” Pembrook CEO Stuart Boesky said. “This is an area where banks and other traditional lenders may not be able to play in the current regulatory environment, yet there are quality deals available that work well for alternative lenders.”