Update from the originator:
As you know, a forced auction process has been initiated to recover the funds for all Aleksandra Apartments loans. The auction is set to end on April 18, 2021, yet no bids have been placed so far. Upon consulting with some field experts, the originator has concluded that the funds gained from the auction would result in approximately 18% losses of the principal loan amount, not to mention the interest, which is unfortunate, to say the least.
While this legal process was initiated to finalize the deals, the originator continued to look for an option that might provide a different and better outcome. As previously stated, another European crowdfunding platform showed interest in refinancing the loans and now the originator is very glad to inform you that this platform, which is Crowdestate, has agreed to carry out refinancing the loans. The refinancing will provide an option for the borrower to return the debt to Bulkestate investors and, in the very best case scenario, will cover the principal amount of investments and a part of the accrued interest as well. The refinancing process is expected to be concluded in 60 days as the paperwork has been already signed and Crowdestate is preparing for putting the objects up for funding.
Needless to say, the originator is very satisfied with this scenario as the forced auction process would recover a considerably smaller amount of funds in a much longer timescale while refinancing allows recovering a larger amount of funds and the process will be much quicker too. While now it is clear that the principal amount of investments will be recovered completely, the accrued interest payment most likely will be smaller than expected and will be applied only for the time period of an initial official term for each loan. It means that no late fees will be paid out for the time that the loan was delayed. Unfortunately, the investors will lose part of the interest payment too, yet, the originator must remind you that recovering even a small part of the interest is quite unexpected luck in this case and the originator has put his best efforts in to reach this outcome. In these times of pandemic, it is also quite the best settlement the originator could have hoped for.
Crowdestate plans to start crowdfunding loans at the beginning of the next week. The first loan that will be put up for funding is "Aleksandra Apartments - Apt.9", while the rest will follow. The originator has contributed all the necessary assistance from their side to ensure the deal between the borrower and Crowdestate and must note that the cooperation among both platforms has turned out to be very smooth and fruitful.
You might wonder how beneficial refinancing could be for Crowdestate if all operations with properties seem to be slow-paced and disadvantageous. The answer lies in their approach as an additional real estate mortgage will be registered on behalf of Crowdestate to provide extra security. The additional property will considerably decrease the LTV and turn the deal much more beneficial and also more secure for next investors.
The originator is very satisfied with their dedication to putting investors' interests as their top priority which has resulted in, hopefully, a successful recovery of debt. the originator's team effort, particularly the legal support, has once more proved to be very effective in finding the way to avoid and decrease any expected losses to the minimum.
Moreover, the originator is very grateful to investors who have been very patient along the process and have been open to various scenarios and outcomes while assuring that their trust is with the originator despite the difficulties and complications.
Refinancing of the loans also means that the auction process has to be ceased. Bulkestate will officially request to pause the auctions as the borrower has to initiate registering of properties on behalf of Crowdestate as soon as the crowdfunding is completed. If the refinancing will fail, the auction process will be resumed accordingly.
The originator will inform all investors when the repayment transfers will take place. Once more, the originator thanks you for the patience and is hopeful that the case will be resolved soon enough.
we believe this is highly illiquid deal, at least in the Baltics:
1. Let’s take a look at the statistics, our friends at Vartus.eu have informed me that for such parameters:
150 square meters (which costs more than 4K euro/ sq. m) old construction has sold only 5 units in 2018 in Riga.
And for+200 square meters (which costs more than 4K euro/ sq. m) old construction has also sold only 5 units in 2018 in Riga.
2. There was already a property for sale in this building back from 2017 - https://www.city24.lv/lv/nekustamais-ipasums/1015933 . The owner wasn’t able to sell it and currently this aparmtent is rented out until 2020 March.
3. Also when I was talking to Sotheby’s they’ve told me that they have another 3 apartments (230 sq m) for sale in that building and a few for rent this is an example online: https://lv.balticsothebysrealty.com/en/real-estate/rent-apartment-riga-ausekla-iela-124048/
The mortgaged property is located on Ausekla street in one of the most prestigious residential areas of Riga. While located in the very centre of Riga, the area is quiet, elegant and surrounded with the marvellous Art Noveau buildings.
The investment object consists of two luxurious apartments that are located in one of the most highly esteemed residential building - Aleksandra Apartments (https://aleksandraapartments.com). The elegant embassy district, peaceful and historic atmosphere, the dock for passenger ships and the Riga Yacht Club are all in the walking distance from the property. Perfectionism and uniqueness that is reflected in every detail of the building are what sets the property apart from any other offers in the market.
The house was built in 1900 but was fully renovated in 2010 with a completely newly built internal infrastructure that includes 24/7 security, concierge services, club facilities for various events, a fitness centre, a fully automated car park, room for bicycles and motorcycles. The property is located in the prestigious embassy district, which is found on the UNESCO World Cultural Heritage list. The historic design and modern technology is a unique example of how these two relatively different things can be combined together nowadays in a beautiful and classical style. The building is built in late Eclecticism style and its architect is a well-known Rudolf Zirkwitz.
The surrounding buildings consist mainly of renovated, pre-war buildings, the first floors of which are commercial areas, and on the higher floors of the buildings - exclusive apartments.
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