Managing uncertainty: Palm Springs Mile Shopping Center

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The challenge:

Manage a $66 million loan at a time of intense regulator scrutiny about large real estate holdings among the nation’s financial institutions.

The solution:

Through extensive and methodical attention to detail of the loan guarantor's financial position, enough credible information was obtained to satisfy the regulators not to downgrade the credit rating. 

The story:  

Palm Springs Mile shopping center in Hialeah, Florida in the early 1990s was collateral to a first and third mortgage held by First Union. The $66 million loan was the bank’s largest loan, secured by property that ran end-to-end for three-quarters of a mile on both sides of a street. The second mortgage holder refused to be paid off. The loans performed well but other loans made by First Union were not. 

Managing Member Geoffrey Curme was able to establish an informal communication with the second mortgage holder regarding any loan payment defaults. Geoffrey was able to effectuate a loan payoff of the first, second, and third mortgages. Through dogged efforts and attention to detail, including a deep understanding of regulatory requirements, Geoffrey was able to monitor the loan and confidently inform the bank’s chief credit officer that the loan was stable.

 

Michelle Jones