LEM Purchases Mezzanine Loan on Tampa Apartments

LEM Mezzanine, a direct lender and investor in high-leverage mezzanine debt and preferred equity, has, through its fund affiliates, acquired a $3.5 million mezzanine loan on two multifamily apartment buildings in Tampa, Florida. LEM's loan-to-value was 95%. The Fund simultaneously sold the piece above 90% to a third party investor. Both the first mortgage and mezzanine loans contained a fixed interest rate and a 7-year term.

"We have been very active in originating and acquiring mezzanine loans and then selling senior and junior positions in our transactions. Our success with these structures has allowed us to commit to the entire transaction knowing that we can sell off pieces later" said Herb Miller, a partner in the fund. "The result is that we are able to provide 95% financing for the borrower and still maintain the appropriate risk for our fund," added Miller.

LEM structures its investments in a variety of different ways including mezzanine loans, preferred equity and A/B notes and specializes in providing financing in transactions where there is existing first mortgage debt. LEM has worked with a number of different servicers and special servicers to develop structures that either comply with existing loan covenants or can be approved quickly. LEM also has relationships with many first mortgage lenders to provide additional proceeds behind new originations that allow the Fund to provide the entire capital structure including first mortgages and mezzanine loans.

LEM, a $200 million fund, focuses on multifamily, office, retail and industrial properties nationwide, generally valued in the $10 million to $60 million range, and makes mezzanine investments of between $2 million and $10 million per property. It provides financing up to 85% to 90% of the capital structure. LEM's principals include Ira Lubert, Jay Eisner and Herb Miller. The Company's objective is to invest $75 million to $100 million per year.