Centre Street Retail Refinance

George Says: "You guys know that I am not a huge fan of high-yield deals, but I surprisingly do not hate this deal. Newly-renovated property, a lease rate low enough for the tenant to succeed, a cannabis business - there is a whole lot to like with this 12% deal."

Blackburne & Sons is pleased to present this First Mortgage secured by a 1,650 SF commercial building and billboard sign on a 0.51-acre lot, located in Albany, Albany County, New York.

The purpose of this loan is to provide cash out to pay for site work and storm water repairs that have been completed and not yet paid for ($157,000). The balance of the cash out is to re-invest in his real estate portfolio. The property was purchased in 2022 for $1,250,000 and is currently free and clear of any liens.

Albany County is a county in the state of New York, United States. Its northern border is formed by the Mohawk River, at its confluence with the Hudson River, which is to the east. As of the 2020 United States Census, the population was 314,848. The county seat and largest city is Albany, which is also the state capital of New York. county is named for the Duke of York and of Albany, who became James II of England (James VII of Scotland). The county is part of the Capital District region of the state.

According to the U.S. Census Bureau, the county has a total area of 533 square miles, of which 523 square miles is land and 10 square miles (26 km2) (2.0%) is water. Albany County is in the east central part of New York, extending southward and westward from the point where the Mohawk River joins the Hudson River. Its eastern boundary is the Hudson; a portion of its northern boundary is the Mohawk.

Albany is the capital city of the U.S. state of New York. It is located on the west bank of the Hudson River about 10 miles south of its confluence with the Mohawk River. Albany is the oldest city in New York, and the county seat of and most populous city in Albany County. Albany's population was 99,224 at the 2020 census and estimated at 101,317 in 2024. The city is the economic and cultural core of New York State's Capital District, a metropolitan area including the nearby cities and suburbs of Colonie, Troy, Schenectady, and Saratoga Springs. With an estimated 913,000 residents, it is the fourth-most populous metropolitan area in the state.

In 2023, the median property value in Albany, NY was $223,000, with a homeownership rate of 37.9%, and the median household income was $59,485. The economy of Albany, NY employs 50,800 people. In 2023, the largest industries in Albany, NY were Health Care & Social Assistance (9,651 people), Public Administration (6,505 people), and Retail Trade (5,565 people), and the highest paying industries were Utilities ($87,188), Management of Companies & Enterprises ($84,427), and Professional, Scientific, & Technical Services ($67,216). The largest universities in Albany, NY are University at Albany (4,800 degrees awarded in 2023), Excelsior University (3,980 degrees), and The College of Saint Rose (1,825 degrees).

The subject property site consists of a 0.51-acre corner parcel that is rectangular in shape and generally level in topography. It is located in the Albany New York metro area and primary highway access to the area is via Interstates 87, 90 and 787. Land uses immediately surrounding the subject are predominantly mixed-use with typical ages of building improvements ranging to 100+ years. Property types adjoining the subject include commercial, retail, office and residential.

The site is improved with a retail building containing 1,650 SF of gross leasable area. The improvements were originally constructed in 1972 and recently renovated. The building has all utilities available and is a single story in height. It is a class C masonry construction with a concrete slab foundation, block and siding exterior walls and a flat rubber roof.

The commercial building is leased to a cannabis tenant whom entered into a 15 year lease with our borrower in November of 2023. The lease is for $3,200 per month for the first 3 years, with yearly increases after that. This tenant just completed $600,000 in interior and exterior improvements to the subject property. These improvements consisted of paving, sewer repair, sidewalks, curbs and benches per city approved plans. They also did extensive interior upgrades.

This tenant started paying rent in November 2024. It is double net: base rent, plus taxes and insurance. Due to the amount of time it took to do all of the renovations, the tenant did not actually move into the property until June 2025.

The site is equipped with 12 parking spaces and a ground leased billboard that is estimated to be worth $700,000 alone, per the appraiser. The billboard is leased for $4,000 per month on a 15 year term lease, signed in February of 2023.

Our borrower also recently put a new roof on the property and installed a new HVAC system at a total cost of $27,000.

It should be noted that this property is located in a flood zone and additional insurance will be required. Blackburne & Sons will collect one full year of property and flood insurance to be prepaid at closing.

The property was formerly a gas station, but the gas station closed, and the USTs were removed in 2008. A Phase I and Limited Phase II were provided by the borrower to our trusted environmental company (CREtelligent). The soil samplings from the 2022 Phase II reported that residual contamination was still present at that time, a result from the previous UST spills. The spills were addressed to the satisfaction of the NYSDEC and were issued a closed status with a NFR (no further action) letter. CREtelligent recommends future testing if subsurface work is to be performed.

Our guarantor is a single man who holds title to the subject property through a Limited Liability Company. This limited liability company has six members, including our guarantor. These members are all family members (mother, brother) and family trusts controlled by the guarantor. The other members are not a part of our loan and have signed an addendum to their Operating Agreement as well as a Corporate Resolution allowing our guarantor to be the only signer on the loan.

In 2023, the LLC reported a loss of $53,217. There is an extension filed for 2024 but a P&L was provided showing reporting a loss of $20,765.

Our guarantor self-reports a net worth of $6,535,532 and has a mid-credit score of 746. His tax returns show adjusted gross income of $390,022 in 2023 and $282,306 in 2022. Our guarantor has filed an extension for 2024 but did provide a W2 that shows $146,503 in income.

Our borrower has a nationwide real estate investment portfolio consisting of industrial and commercial real estate in 12 states at over 1,000,000 square feet.

We hired an MAI appraiser who valued this property at $1,200,000 (AS-IS) Appraised Value.

We also hired a local broker who performed a drive-by opinion of value (BPO) and valued this property at $565,000. It should be noted that the broker did not provide any comparables for the billboard and only gave it a value of $50,000. This is the reason for the large discrepancy between the BPO and the appraised values.

You should spread your mortgage investment portfolio out among lots of different deals. If you have $300,000 to invest, you should invest $10,000 to $20,000 in 15 to 20 different fractionalized first trust deeds. For example, if the deal is a $300,000 first trust deed on an office building in Boise, with a $15,000 investment you would own 5% of the loan. By spreading your money out into a bunch of different deals, you are achieving the diversity of a fund without the failed fund sponsor problem. If you are extremely wealthy, you could double (or even triple) my suggested investment amounts, but be careful about pouring too much money into a single deal. We once had a whole building fall into an old coal mine. Ouch.
Be wise and resist investing in any first trust deed yielding more than 9%. I would personally never invest in a first trust deed with a double-digit yield. The payments slowly grind the borrowers into the dust.
Blackburne’s Law theorizes that a portfolio of 8% and 9% first trust deeds will outperform a portfolio of 11% and 12% first trust deeds over a seven-year term. Only our wisest (and eventually the happiest) investors listen to me.
You can also buy some of our smaller deals in their entirety, but I only recommend this if you are richer than Crassus.
It is very easy to lose money in hard money first mortgages, so fight-fight-fight against the temptation to invest in high-yield deals. As Nancy Reagan used to say, “Just say no.” But if you choose 7% to 9% first mortgages, I predict that you will be very, very pleased.
During the S&L Crisis, commercial real estate fell by 45%. Within three years, values reached new highs. During the Dot-Com Meltdown, commercial real estate fell by 45%. Within three years, values reached new highs. During the Great Recession, commercial real estate fell by 45%. Within three years, values reached new highs. Some time in the next decade, we will have another opportunity to snatch up prime commercial real estate at a huge discount. You will be terrified, but when Blackburne and Sons invites you to join a syndicate to buy a nice commercial property at a 35% discount off its prior high, just remember that the best time to invest is when blood is running in the streets. Why not when real estate has fallen by 45%? You’ll never catch the very bottom because historically the bounces off the bottom happen much too fast. Bounce-soar. You will be terrified, but just remember that the best time to invest is when blood is running in the streets.

Blackburne & Sons Realty Capital Corporation--For more information, contact Tom Blackburne
555 University Ave., Suite 150, Sacramento, CA 95825
Telephone: (916) 338-3232 * Fax: (916) 338-2328
Real Estate Broker -- California Department of Real Estate -- License Number 829677 -- NMLS Number 103430
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