Rye Co-Op Manager Steps in on Financing

Gramatan, co-op manager of Rye Castle at 6 Davis Avenue in Rye, stepped in to seal a financing deal recently:

"a deal put together for Rye Castle, a high-end, 25-unit co-op in Rye, New York. Managed by Gramatan Management, the co-op ran through much of its cash reserve and its line of credit paying for roof repairs four years ago. Although its debt levels were not noticeably high, the co-op found itself with low levels of cash on hand. Analysis of its financial statements — and its modest levels of cash — made buyers uneasy; as a result, some co-op sales in the building have been scuttled in the last few years.

In response, the co-op board arranged for an early refinancing of its 10-year mortgage — originally set to conclude in February 2017 — despite the co-op's mortgage contract, which called for pricey repayments under the principle of "yield maintenance." Although refinancing meant the co-op would need to pay its current lender at least $80,000 in penalties, it also meant it got substantially lower interest costs on its new mortgage…

the co-op didn't have the funds it needed to pay the good faith deposit for the new mortgage…

…as in several other recent cases, Gramatan stepped in and provided the building it manages with a 30- to 45-day loan to help it seal the deal: $25,000, which covered the 1.5 percent deposit on the amount of the mortgage."

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