White Knights or Opportunists? Bridge, Preferred Equity Investors an Option for Struggling Real Esta

GlobeSt.com

October 26, 2020 

Bridge loans and preferred equity are options for hotel owners after loan  forbearance runs out. 

For struggling real estate owners trying to survive the coronavirus-induced recession, the saviors  extending a lifeline are lenders — but whether they are white knights or acting out of pure self-interest  depends on whom you ask. 

Bridge lenders and preferred equity investors are in line to become the go-to rescuers for property  owners, especially hoteliers and retailers that have taken the hardest hit. 

They are not purely selfless, and it’s questionable whether the moniker “rescue capital” is deserved, said  Miami attorney Isaac Marcushamer, who has another phrase in mind. 

“I call it capital of last resort. These aren’t white knights,” said Marcushamer, a partner at Mark Migdal  & Hayden. “They are sophisticated business partners. They are not doing you a favor. They are doing it  to make a profit.” 

Hypothetically, a hotel purchased for $30 million has a $20 million debt, and a fund offers refinancing,  He said it could go two ways, either the lender gets repaid once hospitality picks up or the lender takes  over if it doesn’t. 


You can read the GlobeSt.com story here.  

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