JDI spends a great deal of time sourcing unconventional opportunities. A short time frame, a property idiosyncrasy, a legal or financial problem for an otherwise sound developer are insurmountable obstacles to many lenders or potential joint venture partners. Because of our experience as acquirers of property, we can evaluate the deals based on the potential of the property. We exercise independent judgment, look for value, and are fully committed to a successful project. The stories below illustrate the way in which JDI combines investment and financing expertise to get deals done for our clients.

Reorganization Under Pressure
Client: A hotel owner/operator
Transaction: Foreclosure and reorganization of a 150-room hotel in Ontario, California
Challenge: Our client filed for Chapter 11 bankruptcy protection after its lender had initiated foreclosure proceedings. JDI was able to structure a transaction that satisfied the lender and other creditors, allowing the client to successfully emerge from bankruptcy.
Opportunity: The foreclosing lender offered the owner a discounted payoff, provided the transaction closed within 30 days and prior to the end of a fiscal quarter.
Action: JDI provided a $3,620,000 first mortgage before the 30-day deadline was reached, enabling our client to maintain full ownership and control of the hotel.

A Large Property
Client: A California-based specialist in recycling large, vacant properties.
Transaction: The acquisition of a five-building, 1.5 million square foot industrial complex in upstate New York that had sat vacant for several years.
Challenge: Finding a lender able to underwrite such a large redevelopment effort.
Opportunity: Our client had rehabilitated many other such properties, and had a plan in place to realize the investment potential of this transaction.
Action: JDI provided an initial acquisition loan for $4,850,000 and made available an additional $950,000 for capital expenses, leasing commissions and tenant improvements for a total loan amount of $5,800,000.

A Two-week Window
Client: A New York-based investor
Transaction: Acquisition of a two building, 93,000 square foot, class A office complex in Dublin, Ohio.
Challenge: With less than two weeks until closing, an institutional lender informed our client that its investment committee had turned down the loan.
Opportunity: JDI was able to move quickly—within two days we quoted loan terms, visited the property, met with the investor and conducted other standard due diligence investigations.
Action: Two weeks from the initial contact, JDI funded a $7,000,000 first mortgage loan, allowing our client to acquire this class A project.

An "Impossible" Transaction
Client: A California-based real estate investment company
Transaction: Acquisition of a 25-building, 400-unit garden style apartment complex in Mission Viejo, California.
Challenge: The property’s first trust deed was in default and in order to acquire the property, the investor needed to purchase the defaulted trust deed and then either foreclose or work out a deed-in-lieu of foreclosure. As a result, the investor could not give an acquisition lender a first trust deed at closing but only a pledge of the defaulted note—an “impossible” situation made even more difficult by the three-week closing window.
Opportunity: If successful in taking over ownership, the investor would then convert the security to a simple first trust deed.
Action: At closing, the investor purchased the defaulted note and an affiliate of JDI Loans provided a $10,000,000 acquisition loan secured by a pledge of the note. Approximately 45 days later, the investor reached a settlement with the original owner and took over fee simple title to the project and JDI received a first trust deed on the property. Shortly thereafter, the investor sold the property at a substantial profit.

Traditional Lenders Fall Short
Client: An Orlando developer
Transaction: Purchase of an 88,000 square foot vacant office building in downtown Orlando.
Challenge: In order to beat out several competing bids, the developer had to make a commitment to close in three weeks. None of his traditional or institutional lenders could close in this time frame.
Opportunity: During an accelerated due diligence, JDI determined that our client’s price was fair and that the property was sound.
Action: We provided a $4,200,000 first mortgage loan to acquire the building and fund tenant improvement and leasing costs. The developer was able to execute his releasing plan much quicker than projected, eventually selling the building for a significant profit.

Successful Refinancing
Client: A New York investor and property owner
Transaction: Our client needed to raise $1 million in cash quickly.
Challenge: Our client’s most valuable asset was a New York property that generated substantial cash flow but was encumbered with a fairly small yet limiting first mortgage.
Opportunity: The investor could not refinance the existing mortgage without triggering a substantial penalty. However, he had equity in the property equal to several times the amount of capital that he sought.
Action: JDI arranged an extremely secure second mortgage for the client within a very short timing window.

Time-sensitive Redevelopment
Client: A Jersey City, New Jersey property owner
Transaction: Acquisition of a financier/partner’s development rights, in order to redevelop a vacant 430,000 square foot commercial building into 170 residential condominium units and 40,000 square feet of retail space.
Challenge: The property owner and his financier could not agree on either the timing or the scope of the project.
Opportunity: The financier had given the client a two-week window during which the redevelopment rights could be favorably reacquired.
Action: Within the allotted timeframe, JDI provided $11.9 million in first mortgage financing as a bridge to a construction loan, enabling our client to recapitalize the asset and bring in a new partner with a more compatible redevelopment vision.

Environmental Challenge
Client: A Boston-based investor
Transaction: Acquisition of a 200,000 square foot office/industrial property in Wilmington, Massachusetts.
Challenge: The client’s lead lender pulled out of the acquisition financing approximately seven days before closing, and an obscure environmental problem relating to the presence of lead dust from a previous tenant’s operations made remediation upon acquisition a necessity in order to secure new financing.
Opportunity: Lead dust is not an actionable hazardous substance in commercial properties.
Action: JDI used environmental insurance and escrowed funds as added protection to advance $3.1 million toward the $4.8 million acquisition within the required timeframe.

Default and Recapitalization
Client: The developer of a 39-story, 223-unit residential condominium tower in Chicago’s West Loop
Transaction: Recapitalization, including the purchase of a second mortgage.
Challenge: The developer was in default with its lenders due to various delays and market conditions, and conventional lenders could not handle the recapitalization’s short timeframe.
Opportunity: Our client’s recapitalization could include a $5 million discount on the purchase of a second mortgage encumbering the property, if the transaction closed quickly.
Action: JDI provided the developer with an $8.25 million loan to purchase the discounted second mortgage from a Wall Street mezzanine lender.

Closing on 12 Properties
Client: A Florida-based developer
Transaction: Acquisition of 12 land parcels in the Florida Keys, Clearwater, and Sarasota, all with various closing dates.
Challenge: Conventional lenders could not complete the transaction in time because of the difficulty in underwriting 12 separate parcels.
Opportunity: JDI had a longstanding relationship with the developer and knew of his project to include the land parcels in six different waterfront resort projects.
Action: Within two weeks of initial contact, we provided the developer with a $9.75 million loan, secured by the 12 parcels and funded in four installments as the parcels closed.

Quick-close Contingency
Client: A California-based developer
Transaction: Acquisition of a 4.1-acre parcel of land in Huntington Beach, California, consisting of a parking lot and single-story building.
Challenge: Our client had 30 days to close on the property in order to begin developing it as a 135-unit, four-story, age-restricted condominium.
Action: Within three weeks of initial contact, JDI provided a $15.75 million bridge loan for a six-month term with a six-month extension, allowing the purchase to move forward.

Delayed Title Resolution
Client: An Orlando developer
Transaction: Acquisition of a 23-story, 386,000 square foot office building and an adjacent surface parking lot in downtown Jacksonville, Florida.
Challenge: Three weeks before the scheduled closing date, problems developed with a redevelopment agreement between the owner of the parking lot and the City of Jacksonville, and these problems would not be resolved until at least 45 days after the building was to close, jeopardizing the lender’s support of the deal.
Opportunity: The developer and the seller had negotiated a deal to convey the parking lot at a later date.
Action: Within three weeks of first contact, JDI provided a $14.4 million first mortgage secured by two-thirds of the office building’s square footage.

Complete Makeover
Client: An Orlando developer
Transaction: Acquisition of an older 18-story, 140,000 square foot vacant office building in downtown Jacksonville, Florida.
Challenge: The building rehabilitation required a complete gutting of the structure, including asbestos removal.
Opportunity: The developer had a favorable purchase price for the building, provided that he closed within 30 days of signing the contract.
Action: Within three weeks of initial contact, JDI provided a $15.6 million bridge loan for a six-month term with a six-month extension option, allowing the purchase to move forward.