Lending guide · First lien
Distressed commercial real estate financing
Capital for properties and ownership situations that conventional processes are not built to handle.
In short
Distressed commercial real estate financing is capital provided against properties with operational, financial or structural problems — maturing debt without a takeout, low occupancy, deferred maintenance, partnership disputes or stalled business plans. It is underwritten on the asset and the plan to fix it rather than on current performance.
Hard money lending guidelines
Asset-based financing. We focus on the property's value and the owner's equity, not a credit score. Low credit does not rule out a request. Every deal is subject to underwriting.
- Annual rate
- From 11.5%
- Origination
- From 2% of the loan amount
- Term
- 6 to 12 months
- Payments
- Interest only
- Loan-to-value
- Up to 70%
- Lien position
- First position only
Third party closing costs are separate.
Every term sheet is different. Every deal goes through underwriting and has specific terms. These are guidelines, not a commitment to lend.
What counts as distress
Distress is rarely one problem. It usually shows up as a combination of financial pressure and an operating issue that created it.
- A maturing loan with no conventional refinance available
- Occupancy or income that has fallen below break-even
- Deferred maintenance that is compounding the operating problem
- Partnership friction, a forced buyout, or a broken capital stack
- Title, litigation or entitlement complications
- A business plan that stalled mid-execution
Why operators evaluate distress differently
Distressed assets are underwritten on the plan to fix them. That requires knowing what the repair actually costs, how long a turnaround takes, and which problems are structural versus temporary.
Stokley Capital acquires and repositions distressed commercial real estate as an owner, which is why we can evaluate operational distress rather than screening it out.
Disclose early, move faster
The complications are the reason you are here, so lead with them. A request that discloses the title issue, the litigation, or the partner problem up front gets a faster and more reliable answer than one where it surfaces in diligence.
Request loan terms
Describe the situation.
Questions
Answers before you ask.
- What is distressed commercial real estate financing?
- Capital provided against a commercial property experiencing financial, operational or structural problems, underwritten on the asset and the plan to resolve those problems rather than on current performance.
- Will you look at a property with litigation or title issues?
- Yes, provided the situation is disclosed up front. Complex title and legal situations are a core part of what Stokley Capital works on.
- Do you also buy distressed properties outright?
- Yes. Stokley Capital acquires and repositions distressed and value-add commercial real estate as a principal in addition to evaluating financing requests.
- What loan sizes do you make, and do you publish rates?
- Loans are typically $1M–$5M, first lien only, and larger loans are considered. We do not publish rates or leverage: every request is evaluated on the specific property, situation and business plan, and any financing is subject to underwriting, diligence, documentation and approval.
Nothing on this website is an offer to lend or a commitment of capital. All loans are subject to underwriting, due diligence, documentation and approval. Published lending guidelines are for general guidance only. Every deal goes through underwriting and has specific terms.
Next step
Is the property under pressure?
Send the property, the amount and the deadline. A principal will respond directly.