Financing insights / 14
Distressed Commercial Real Estate Financing & Rescue Capital
Commercial real estate problems often become financing problems.
At a glance
Commercial real estate problems often become financing problems.
MDN Capital Consulting helps property owners evaluate private-credit, bridge, hard-money and other rescue-capital solutions for distressed and time-sensitive commercial real estate transactions.
Financing overview
Financing at a Glance
What Is Commercial Real Estate Rescue Capital?
Rescue capital is financing designed to address a property or capital structure facing financial pressure and create time and liquidity for a defined business plan.
Can a Defaulted Commercial Mortgage Be Refinanced?
Potentially. Private lenders may consider refinancing a loan already in default if sufficient collateral value exists and the borrower presents a credible resolution and exit strategy.
Foreclosure and Time-Sensitive Financing
- Property value
- Existing payoff
- Foreclosure or sale date
- Requested loan amount
- Property income and condition
- Reason for default
- Proposed resolution
- Exit strategy
Hypothetical example
Illustrative Scenario — Maturity Default
Property value: $8,000,000. Existing payoff: $3,600,000. Requested bridge loan: $4,200,000. A private bridge lender may evaluate whether value, economics, sponsor and stabilization plan support the request.
Illustrative only. Financing and terms depend on lender underwriting.Construction Rescue Capital
Projects sometimes encounter funding gaps because of cost overruns, lender problems, delayed equity, permit issues or unexpected construction costs. Potential structures may include senior bridge debt, completion financing, preferred equity or mezzanine capital.
Borrower questions
Frequently Asked Questions
Can I refinance before a foreclosure sale?
Potentially, but sufficient time is required for underwriting, diligence, documentation and closing.
Can a private lender refinance a loan already in default?
Some lenders will consider defaulted loans when collateral and the overall transaction support the request.
What if the property isn't stabilized?
Bridge financing is used in many transitional situations, although the lender must understand how stabilization will occur.
Can rescue financing pay delinquent taxes or other liens?
Potentially, subject to lender approval, lien priority and sources and uses.
What if I need money to finish construction?
Completion financing may be possible if the remaining budget, collateral, sponsor contribution and exit are supportable.
Financing inquiry
Facing a Time-Sensitive CRE Situation?
Early review is particularly important when maturity, default or foreclosure deadlines are involved.