Avatar Financial Group LLC has funded a bridge loan secured by a fully leased light industrial warehouse and distribution facility in Santa Ana. The short-term financing totals $4.75 million and is structured as a two-year, first-lien loan, originated at an approximate 60% loan-to-value ratio.
The new debt consolidates the property’s capital stack by replacing two existing loans. Proceeds were used to retire the prior first mortgage and to pay off a junior loan that had already passed its maturity date, simplifying the borrowing structure under a single senior position.
The industrial building is occupied by a tenant that has already committed significant capital to its interior build-out. According to Avatar, the tenant’s rent obligations had begun before the bridge loan closed, providing the lender and sponsor with an initial period of operating income as the new financing took effect.
The borrowing strategy is designed as an interim solution while the tenant establishes a payment track record. After roughly six months of rental collections under the new lease, the sponsor plans to seek long-term, permanent financing to refinance Avatar’s bridge loan and lock in a more conventional capital structure on the stabilized asset.
Commenting on the underwriting, T.R. Hazelrigg IV, president and co-founder of Avatar Financial Group, noted that a lease without an operating history is evaluated differently than a lease with proven payment performance. He contrasted Avatar’s approach with that of traditional banks, which, he said, are more likely to wait for an established record of rent collections before extending credit.
Hazelrigg added that Avatar’s decision was supported by the conservative loan basis and the tenant’s own investment in the space. With a 60% loan-to-value ratio and substantial tenant capital deployed into the build-out, he indicated that the risk profile was acceptable for the lender despite the relatively recent lease commencement.
The collateral is an 18,876-square-foot light industrial property located at 4001 West Carriage Dr. in Santa Ana. The building sits on approximately 0.9 acres and is positioned less than two miles from Interstate 405 and State Route 55, offering regional connectivity for warehouse and distribution operations.
