A non-performing mezzanine loan on a newly built seniors housing community in Upper Marlboro, Maryland, is up for auction, with Newmark leading the process. The associated property was built in 2021 with 282 units of independent living, assisted living, memory care and active adult. The three separate buildings are interconnected via a skybridge with large glass windows. Common area space totals 134,642 square feet across the community.
The fixed-rate construction loan was originated in December 2019 in the amount of $22.5 million to fund the project. It carried an interest rate of 12% (6% current and 6% Paid-in-Kind). The loan was later modified in October 2020 to increase its balance to $27.2 million, while also raising the interest rate to 15% (5% current and 10% PIK), among other provisions.
The loan was structured with a one-year extension option that would have extended the maturity date to December 2024. However, the loan entered maturity default following the December 13, 2023 maturity date and is currently accruing at the default interest rate of 25%. Inclusive of default interest, late fees, etc., the current balance of the loan is approximately $38.9 million, as of January 2024.
The mezzanine lender, Saperean Largo Mezz, LLC (the secured party), provided notice for a UCC Article 9 foreclosure sale of the 100% of the membership interests (the collateral) in Largo Senior Living, LLC (the borrower), which membership interests are currently owned by Largo Mezz, LLC (the Debtor). to occur on February 20, 2024. The public auction will be held on February 20, 2024 at 3:30pm EST via Zoom.
The collateral will be sold to the highest qualified bidder; provided, however, that the secured party reserves the right to cancel the sale in its entirety, or to adjourn the sale to a future date. Thomas Tumbleson of Tumbleson Auction Company, an Illinois State licensed auctioneer, will conduct the auction, and the collateral will be sold together in a single block. Interested parties who intend to bid on the above collateral must contact the secured party’s broker to receive the Terms of Sale and bidding instructions.
Interested parties who do not contact the secured party’s broker prior to the sale will not be permitted to enter a bid. Attention: Brock Cannon, at Newmark, 125 Park Avenue, New York, NY 10017, (212) 372-2066, brock.cannon@nmrk.com. Upon execution of a standard confidentiality and non-disclosure agreement, additional documentation and information will be available.
