Back in 2012, with the dislocation in the lending markets still alive and well, Rockspring was approached with an interesting proposition by an operator looking to acquire the Harborwalk project, a bank-owned 550-acre master planned community in the Texas bay area. The operator needed cash to achieve the best pricing and close quickly on the highly-valued property. Although Rockspring typically made investments directly into real estate; would it be willing to provide a bridge loan to allow a quick acquisition of a bank-foreclosed property?
With our local market knowledge of the property and submarket, we decided to provide a $7.1 million bridge loan to the new owner of the Harborwalk project. The collateral for this loan included several hundred developed and undeveloped lots, a sales office, a marina, a retail store, a swim center and a yacht club with a restaurant. In addition, the property had 400 acres of land that could be further developed and millions of dollars in municipal utility district receivables.
Very recently, the borrower paid off the loan in full after repositioning the property. This deal was a win-win for all parties as the operator was able to quickly get the capital needed to secure this valuable asset during a time U.S. financiers were strict on giving loans, which in turn provided our investment partners a nice return.
This transaction displays the creative deal structuring by Rockspring to further diversify our fund portfolio. We are currently on the lookout for other investments that will provide our partners with solid risk/reward returns and look forward to more opportunities like this in the near term.