Opal Holdings
Seem to be a lot of news on this shop lately. Built a very large office portfolio rather quickly, and seems to be getting sued by every lender on loans less than 5 years old. According to some of the articles the founder borrowed on both the leasehold and fee mortgages. Is this common I don't understand how a lender would allow this?
Based on the highest ranked content on WSO, here are some insights related to your query:
Borrowing on Both Leasehold and Fee Mortgages:
Lender's Perspective:
Market Norms:
Capital Expenditures (Capex):
Building Relationships with Financial Institutions:
For more detailed discussions and insights, you might want to explore the following threads on WSO: - https://www.wallstreetoasis.com/forum/real-estate/breaking-into-commerc…</a">Breaking Into Commercial Real Estate - https://www.wallstreetoasis.com/forum/real-estate/this-is-how-guys-are-…</a">This is how guys are getting rich in real estate
If you have more specific questions or need further clarification, feel free to ask!
Sources: This is how guys are getting rich in real estate, Rational behind a lender choosing a loan term, This is how guys are getting rich in real estate, Breaking Into Commercial Real Estate, Mezz Debt vs. Traditional Debt Financing
A bunch of shady New York scumbags. Zero equity in any of their deals with over 100% leverage. Looks like they haven't been paying any vendors but I guarantee those pigs are getting well fed.
Just read about him on the real deal the last two days. Seems like a typical schemer deserves everything coming his way. Has anyone worked on deals with these guys?
Heard of them in certain markets - I haven't interacted with them personally. The leverage comment above is 100% correct and I believe this is a reason why the bifurcation of the land and asset will not be able to be an "arms length entity" going forward. In theory, if they own both they can default on the senior and have the lender keep them current on the GL.
Bingo
I have interacted with them personally and this is spot on. So far, their defense to some of the lawsuits out there is that everything was fully disclosed in the loan documents which isn't fully accurate but also isn't completely false either. Just a headache all around.
I know people who have worked with them and all have said the same thing. Shady business practices, unorganized, and the principle clearly has no regard for his assets as he made all of his money upfront,
I'm having trouble understanding the structure of their deals ... is the below correct?
1. Opal buys the office building fee simple, using a loan
2. Opal bifurcates the fee simple property interest into (1) leasehold interest of the building and (2) ground lease interest
3. Opal obtains additional loans on the ground lease interest
If the above is true ... why would a lender allow bifurcation of property interests if it lent on the fee simple estate? Or is this just due to a covenant-lite loan doc.
By setting up a convoluted LLC ownership structure and only presenting the executed ground lease at closing allowing for minimal due diligence time... or so I hear.
The principal seems like the typical guy who got in over his skis. Seems Lakewood produces a lot of these type of people. I wonder why?
https://ten31.beehiiv.com/p/the-promote-lads-of-lakewood-fundraising-sp…
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