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Special Reports
Hard Money
Kennedy Closes Loans Totaling $22 Million+
By James Comtois
Hard money lender Kennedy Funding Inc. here has recently closed two loans totaling
more than $22 million.
The most recent is the closing of a $12.5 million loan to Potranco Limited LP,
a Texas development partnership of Alex Chambers, president and CEO of Blackhawk Development, Austin and Chip Field.
Potranco will use the loan toward purchasing a 173.56-acre land tract in Bexar County, Texas, in a rapidly developing
area that is actually within the jurisdiction of San Antonio. The area, referred to as the "donut hole"
and previously held by the state of Texas General Land Office, had previously been sold at auction but Potranco
was able to secure the option when the original purchase fell through. "Unlike traditional lenders, which
will not even consider raw land as collateral, Kennedy Funding takes a strong look at every aspect of what borrowers
can offer," Jeffrey Wolfer, president/co-CEO of Kennedy Funding, noted. Mr. Wolfer said that Kennedy is able
to obtain in-depth reports on a schedule that returns relevant information within days, allowing loans to close
in less than a week. So, in the case of Potranco, the collateral information was positive.
Another factor contributing to the value was the site's location as a "hard
corner," where completion of a planned road will lead to premium pricing of whatever is built on the site.
In addition to the anticipated mix of retail, office and multifamily residential development, Potranco plans to
include desirable green space within the site. Mr. Wolfer indicated that with more than half of the planned development
as retail, it furnishes a strong drawing point for the residential communities that have sprung up in the immediate
environment.
In addition to the $12.5 million loan to Potranco, Kennedy also closed on a $9.54
million loan to High Grove Development Group LLC (Legasus Properties, LLC), whose principals are Robert A. Corliss
and Theodore C. Morlok, to develop a collection of retreat homes on one to five acres in a North Carolina mountain-ridge
setting. Based in North Carolina, High Grove plans a 500-acre upscale community - High Grove Estates - at the foothills
of the Great Smoky Mountain range. High Grove needed a loan in a short amount of time to proceed with work on 91
lots in the first phase of the development that will set the stage for another 85 lots to be developed eventually.
The good news is that 13 of the first 91 homesites already have buyers. The difficult news was that the traditional
loan was not forthcoming. Kennedy was able to quickly provide the funds. On the same day as the High Grove closing,
the same developers closed with Kennedy on a $20.5 million loan for their River Rock community 40 miles to the
south in Cashiers, N.C. Both communities are a short drive from major North Carolina cities and from Atlanta. High
Grove put up the unsold 78 lots, part of a 700-plus acre tract in Whittier's Barkers Creek area, as collateral.
"We do not depend on a 'formula' to assess collateralized properties. More importantly, we look at the whole
picture instead of just a couple of ratios or statistics. We have been doing this for the two decades ... and will
continue to use good economic judgment while tailoring each loan to individual ... circumstances," Mr. Wolfer
said.
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