Turning a Retail-Heavy Mixed-Use Asset Challenge Into a Cash-Out Refinance: Essex’s Strategic Market-Driven Approach

Problem: The sponsors approached Essex with a mixed-use asset where more than half the income came from local retail – a profile many lenders treat conservatively. Their long-time relationship bank initially sized the refinance as a cash-in, full-recourse execution on a 25-year amortization schedule. The structure was restrictive, expensive, and out of sync with the property’s performance, despite the sponsors being substantial deposit holders at the bank.

Solution: Essex ran a full market process to establish true, third-party competitive pressure. Despite the retail-heavy income profile, we sourced alternative structures with stronger economics, more proceeds, longer amortization, and limited recourse. These market quotes became the foundation for a strategic re-engagement with the relationship lender.

Outcome: The refinance shifted from a restrictive, cash-neutral structure to a materially improved package: higher proceeds, lighter recourse, stronger economics, and a more flexible long-term structure. What began as a potential cash-in scenario ended with cash out, better loan terms, and a strengthened relationship between the sponsors and their bank. This transaction demonstrates the value of disciplined competition in the middle market and reinforces that mixed-use assets – even with meaningful retail exposure – can secure compelling financing when the process is run correctly.