WHAT WE DO
At PenTrust Real Estate Advisory Services, we:
- Identify, originate, negotiate complex transactions and close both debt and equity real estate investments
- Perform due diligence, underwriting and market research
- Manage mortgage and equity servicing for several diverse real estate investors
- Oversee and monitor real estate portfolio management and performs ongoing property inspections and analysis
- Serve as a real estate marketing agent which includes investor relations and capital formation
- Maintain ongoing working relationships with real estate developers, contractors, architects, engineers, banks, insurance companies, and pension fund administrators.
PenTrust originates first mortgage loans or equity investments for the development of commercial real estate projects that meet the following criteria:
- Projects are of substantial quality and are generally located in Pennsylvania, Ohio and West Virginia.
- Most projects are new construction or substantial renovation of existing properties, utilizing 100% union building trades labor.
- Property types include office, industrial, retail, multi-family housing, lodging and other opportunities in strategic locations with easy access to major highways.
- Project size ranges from $1 million to $40 million.
- Transactions are prudently structured to achieve market or above-market rates of return while minimizing potential risk.
- Construction loans are funded monthly during the course of construction which many times convert to permanent fixed rate loans.
- Equity investments are typically structured as limited partnerships or participating mortgages.
During the construction phase of each project, PenTrust works with the local union building trades and contractors to monitor compliance with the union labor requirement, and to ensure that the job is on-time and on-budget. After the completion of construction, PenTrust also monitors the financial performance and physical condition of each property.
PenTrust underwrites real estate investments including construction and permanent first mortgage loans, equity participating first mortgage loans and limited partnership interests and investments. Investments underwritten for the ERECT Fund require new construction or substantial renovations. During the construction phase of an ERECT Fund project, PenTrust works with the local union building trades and contractors to monitor each project to ensure that it is completed using required construction standards and requirements. After the completion of construction, PenTrust oversees and monitors the performance of each property through its project servicing department. To identify potential investments, PenTrust will:
- Request and analyze financial information on project and determine if project meets investment criteria.
- Draft term sheet and submit to borrower/partner. Negotiate terms and conditions of deal with borrower/partner.
- Prepare application/letter of intent based upon negotiated term sheets and collect applicable fees.
- Complete submissions including appraisal information, sensitivity analysis, lease analysis, tenant credit worthiness, borrower or partner financials, neighborhood and local economic and demographic information, industry information, and construction costs analysis.
- Initiate closing process on approved transactions. Arrange third party reports such as appraisals, environmental reports, engineering reports, title updates, insurance and engage attorneys to prepare legal documentation and coordinate the closing process.
- Review and negotiate all legal documents.
- Review, analyze and request revisions if necessary, on all third party reports including appraisals, environmental reports, and engineering reports.
- Prepare all necessary items as required per the closing agenda.
- After closing, review and summarize leases, analyze terms of leases compared to underwriting and market criteria, review periodic project operating statements, review annual project budgets, analyze credit worthiness of tenants, prepare investment stability analysis, and analyze and recommend solutions for all proposed requests from the transaction participants.
PenTrust services all of the loans and investments for The ERECT Funds and also services loans for other financial institutions and funding sources. PenTrust's servicing department has a solid reputation for the highest level of support and personalized assistance for all parties involved. PenTrust emphasizes the need for active communication, and our knowledgeable staff can answer questions regarding balances, payment application, escrow account information, as well as discuss leases and loan terms. State-of-the-art electronic technologies are employed for transaction administration that allow for an immediate response to unexpected situations and help provide for a cooperative business like relationships among all parties.
PenTrust manages investment portfolios by providing the following services:
- Collection and Application of Investment Payment: Continuously during the term of the loan or equity investment, PenTrust prepares invoices for payments due (this includes principal and interest payments, escrow payments and preferred return payments) and receives and applies all payments due under the investment documents. A complete and accurate account of all such amounts invoiced and collected is maintained and monies are deposited with Trustee or Bank Lender or Investor no later than the next business day with a detailed report showing payments applied to each loan. PenTrust notifies Trustee or Bank Lender of any payment that is past due and pursues collection of late fees when applicable.
- Collection of sufficient funds for real estate tax and insurance escrows when applicable under the investment documents: PenTrust as escrow agent, prepares escrow analysis and adjustments as required, collects deposits and holds funds for payment of real estate taxes and insurance premiums or for any other designated purposes under the investment documents, and makes timely disbursements of such obligations. Collection of evidence of real estate tax payments annually: PenTrust verifies that tax payments have been made by collecting tax bills, tax receipts and cancelled checks along with tax confirmations signed by borrowers or partners that all real estate taxes billed have been paid in full for each property.
- Collection of Insurance Certificates evidencing coverage of the security as required in the investment documents ensuring investment is fully insured and properly documented.
- Preparation of UCC Financing Statements - Prepare for signing, filing and recording on a timely basis, and also for termination at release of mortgage.
- Coordination of satisfaction documents, termination and/or release of mortgages, assignment of leases (prepare for recording) as required.
- Examination of Construction Draws and Capital Calls: Review and analyze draw requests from borrowers or capital calls from General partners, update each budget, review construction inspections reports, AIA Forms and invoices, prepare title endorsement and disbursement.
- Collection and review of annual financial statements, operating statements, rent rolls and other required information from borrowers or partners in accordance with investment documents.
- Preparation of verbal and written inquiries made by borrower, lender, investor, independent auditors, etc. that occur in the normal course of loan servicing such as loan payoffs, mortgage satisfaction, releases, modifications, audit confirmations and various borrower or partner requests requiring lender/investor review, response and/or approval.
- Inspection of properties on annual basis and preparation of reports.
- Calculation and collection of payments from participating mortgages, limited partnership interests or property sales proceeds in conjunction with all of the above.