Pacific Ave #2

By the time this loan came to us, we'd already made two prior loans on this exact property: an oceanfront home on Pacific Avenue in Solana Beach worth $8 to $9 million. We knew the collateral intimately. We knew the borrower's track record. The only question was whether the use of funds made sense, and it did.

We provided $1.5 million as a cash-out refinance, a straightforward deployment against a property with massive equity. Our LTV was conservatively low, and the borrower's history of clean payoffs gave us complete confidence. When you've already lent against a property multiple times and been paid back each time, the risk profile is about as clean as it gets.

This is the compounding advantage of relationship lending. Each successful deal reduces the friction and risk of the next one. The third loan on the same collateral is a fundamentally different proposition than the first.