FEATURED CASE STUDY – 06
Creative Financing Structure Saves $2.4M in Interest
About
Structuring an Innovative Dual-Financing Solution
The owners of an independent grocery store chain approached us for assistance in financing the purchase of the retail center housing one of their flagship stores. They had already approached their relationship bank and several others, each declined despite strong financials, credit, and occupancy metrics.
The declines stemmed not from property or sponsor strength, but from the presence of one tenant: a cannabis grow operation. While the center was otherwise fully leased with long-term tenants and strong income, the cannabis component rendered the property unfinanceable by conventional lenders.
Problem
Traditional Lenders Refused Due to Cannabis Tenant
Despite solid fundamentals and strong tenancy, the cannabis grower’s presence caused all traditional lenders to decline, blocking acquisition financing for an otherwise high-quality property.
Goal
Secure Competitive Financing Without Excessive Cost
The owners wanted to finance the acquisition under conventional terms while avoiding the high rates and restrictive terms typical of non-bank cannabis lenders.
Solution
Segmented Condominium Structure for Dual Financing
We worked with legal counsel to separate the cannabis-occupied portion of the property into its own condominium unit. This allowed the non-cannabis portion to be financed through a conventional bank loan, while the cannabis segment was financed separately by a non-bank lender, preserving favorable terms across the majority of the asset.
Innovative Dual-Lender Structure
We leveraged legal segmentation to unlock a hybrid lending structure that balanced compliance, cost-efficiency, and long-term financing flexibility.
Phase 1
Evaluated tenant mix and property income structure
Identified cannabis tenancy as primary financing barrier
Modeled scenarios for risk-adjusted financing alternatives
Phase 2
Legal Segmentation & Facility Design
Recommended condo conversion to isolate cannabis-occupied unit
Arranged separate facilities: one conventional bank loan, one non-bank loan
Ensured ownership and operational control remained unified
Phase 3
Execution & Financial Impact
Closed on both facilities under favorable terms
Achieved blended financing cost reduction of ~$600K per year
Realized $2.4M in total interest savings over loan life
Result
Dual-Financing Structure Reduced Annual Interest by $600K
Through strategic segmentation, we unlocked conventional financing on 90% of the property while isolating risk on the cannabis-occupied portion.
This innovative structure delivered roughly $2.4M in savings over the loan’s life, transforming a seemingly unfinanceable property into a high-performing investment.
CASE STUDIES
