Guilford Village Commercial

1. Executive Summary

Transaction Date:	September 19, 2025	Borrower Entity:	Single-asset LLC (to be formed)
Loan Officer:	Joann M. Smith	Sponsor/Guarantor:	Robert Sachs
Existing Exposure:	$23,510,748	Proposed Total Exposure:	$30,510,748
Existing Deposits:	$5.77MM	Average Balances:	$11.58MM
Loan Request:	$7,000,000	Loan Type:	Construction financing

Key Financial MetricsInitial DSCR
1.22x
Stabilized DSCR
1.54x
Debt Yield
10.0%
Interest Rate
6.10%

Project Overview: Construction financing for the development of three retail buildings totaling 18,200 SF, anchored by Chipotle, Starbucks, and Aldi supermarket (ground lease), plus an additional 6,000 SF of retail space to be leased prior to final funding. The development is strategically located on Boston Post Road in Guilford, Connecticut.

2. Deal Summary

Property Information

Property Address	1940 Boston Post Road, Guilford, Connecticut
Property Type	Retail Development - Multi-tenant
Total Development Area	24,200 square feet across three buildings
Key Tenants	Chipotle Mexican Grill, Starbucks Coffee, Aldi Supermarket (ground lease)
Additional Space	6,000 square feet retail space to be leased
Planned Improvements	Complete site development including utilities, parking, landscaping, and building construction
Strategic Rationale	Premium Boston Post Road frontage in affluent market with zero competitive retail pipeline

Proposed Guilford Village Commercial Development Site Plan

3. Background & Track Record

Sponsor Profile: Robert Sachs

        Experience & Qualifications
        Seasoned real estate investor with over 20 years of development experience in Connecticut
Owner and operator of Cherry Hill Construction, generating $30 million in annual revenue
Proven track record includes successful completion of Mariners Landing (147-unit multifamily development)
Established portfolio of retail and multifamily properties throughout Connecticut
Strong banking relationship with Ion Bank - all existing loans performing as agreed
Full personal recourse guaranty provided for this transaction

    

Financial Capacity

Construction Company Revenue	$30,000,000 annually
Real Estate Portfolio Value	$50,000,000+ (estimated)
Banking Relationship	10+ years with Ion Bank
Payment History	All payments current and timely

4. Market Analysis

Market Metric	Current Value	Market Analysis
Vacancy Rate	1.1%	Exceptionally low vacancy demonstrates strong market demand
Availability Rate	1.8% (29,000 SF)	Limited available space indicates favorable supply/demand balance
Average Market Rents	$21.00/SF	Consistent 2% annual growth reflects stable market fundamentals
New Supply Pipeline	Zero	No competitive new retail developments under construction
Traffic Count	High volume	Boston Post Road is primary commercial corridor with excellent visibility

        Demographic Profile
        Trade Area Population: Affluent suburban demographics with strong disposable income
Traffic Patterns: High daily traffic counts on Boston Post Road support retail visibility
Income Levels: Above-average household incomes in primary trade area
Competition: Limited direct competition within immediate submarket

    

5. Tenant & Lease Roll

Tenant	Size (SF)	Annual Rent	Rate/SF	Lease Term	Structure	Status
Chipotle	2,300	$175,000	$76.09	15 years + renewal options	NNN	Lease executed
Starbucks	2,400	$172,800	$72.00	10 years + renewal options	NNN	Lease executed
Aldi	13,500	$180,000	Ground lease	20 years + renewal options	NNN	Ground lease executed
Vacant Retail	6,000	$390,000*	$65.00	Contingent	NNN	To be leased
TOTAL STABILIZED	24,200	$917,800	Avg: $65.00	93.4% occupied upon lease-up

*Pro forma rent based on current market rates. Final funding contingent upon lease execution for vacant space.

6. Risk & Mitigants

LEASE-UP RISK
6,000 SF of retail space remains to be leased before final funding

Mitigation: Phased funding structure ties final $2.3MM disbursement to lease execution. Strong market demand and prime location support successful lease-up within projected timeline.

CONSTRUCTION RISK
Complex multi-building construction project with potential cost overruns

Mitigation: Sponsor owns established construction company ($30MM revenue) with proven track record. Full personal guaranty provides additional security. Detailed construction budget with appropriate contingencies.

MARKET RISK
Retail market volatility and potential tenant credit deterioration

Mitigation: National credit tenants with strong financial profiles. Long-term leases provide stability. Zero competitive retail pipeline protects market position.

CASH FLOW RISK
Construction period with limited cash flow generation

Mitigation: 2-year interest-only construction period. Strong covenants (minimum 1.25x DSCR, 10% debt yield). Phased funding controls cash outflow timing.

7. Financial Analysis

Phase I Analysis - Chipotle & Starbucks Only

Base Rental Income	$527,800
Less: Vacancy & Credit Loss (5%)	($26,390)
Effective Gross Income	$501,410
Less: Operating Expenses	$89,455
Net Operating Income	$411,955
Annual Debt Service	$411,955
Debt Service Coverage Ratio	1.22x

Stabilized Analysis - All Tenants Leased

Base Rental Income	$917,800
Less: Vacancy & Credit Loss (5%)	($45,890)
Effective Gross Income	$871,910
Less: Operating Expenses	$306,482
Net Operating Income	$565,428
Annual Debt Service	$565,428
Debt Service Coverage Ratio	1.54x
Debt Yield	10.0%

7. Financial Analysis (continued)

Detailed Construction Budget

Cost Category	Amount
Land Acquisition Cost	$500,000
Approvals & Architectural/Engineering Plans	$700,000
Offsite Improvements (utilities, roads)	$500,000
Sitework & Site Infrastructure	$3,000,000
Chipotle Building Construction	$975,000
Starbucks Building Construction	$1,050,000
Additional 6,000 SF + General Conditions	$2,300,000
TOTAL PROJECT COST	$9,025,000

        Loan Structure Summary
        
                Loan Amount
                $7,000,000
            
                Loan-to-Cost Ratio
                77.6% (below 80% maximum)
            
                Stabilized Property Value
                $9,333,333 (10% cap rate on NOI)
            
                Stabilized Loan-to-Value
                75.0% (at maximum limit)
            
                Equity Investment
                $2,025,000 (22.4% of total cost)

8. Proposed Terms

Term	Details
Loan Amount	Up to $7,000,000
Loan Purpose	Construction financing for retail development
Maximum Loan-to-Cost	80% of total project cost
Maximum Loan-to-Value	75% of stabilized appraised value
Total Term	22 years (2 years construction + 20 years permanent)
Construction Period	24 months interest-only
Permanent Period	20 years fully amortizing
Interest Rate	~6.10% fixed for initial 7 years, resets every 5 years thereafter
Rate Floor	5.00%
Guarantor	Robert Sachs - full recourse personal guaranty
Prepayment	5-4-3-2-1 declining prepayment penalty, open window before rate reset

Financial Covenants & Monitoring

        Ongoing Financial Requirements
        Minimum Debt Service Coverage Ratio: 1.25x (tested annually)
Minimum Debt Yield: 10% (tested annually)
Maximum Loan-to-Value: 75% (tested at stabilization)
Maximum Loan-to-Cost: 80% (at loan closing)
Construction Monitoring: Monthly inspections by qualified third-party
Financial Reporting: Quarterly financial statements from sponsor
Reserve Requirements: 6 months debt service reserve at stabilization

    

9. Closing Conditions

Condition	Requirements
Appraisal	Full narrative appraisal with stabilized value opinion and construction cost analysis by certified appraiser
Environmental	Phase I Environmental Site Assessment with clean findings, no evidence of contamination
Title Insurance	ALTA owner's and lender's title insurance policies with construction endorsement and assignment of rents
Zoning	Zoning compliance letter confirming permitted retail use, any required variances or site plan approvals
Insurance	Builder's risk insurance during construction, permanent property insurance post-completion, general liability coverage
Financial Documentation	Personal financial statements, tax returns, construction contracts, lease agreements, project budget

Construction Monitoring Protocol

        Funding Controls & Monitoring
        Monthly Inspections: Third-party construction monitoring with progress reports
Phased Funding: Disbursements tied to construction milestones and lease execution
Retainage: 10% of each draw held until substantial completion
Final Requirements: Certificate of occupancy and final inspection for final disbursement
Reporting: Monthly draw requests with detailed cost breakdowns and progress photos
Change Orders: All material changes subject to bank approval

    

10. Recommendation & Conclusion

            RECOMMENDATION: APPROVE
        
            Support $7,000,000 construction loan under proposed terms

        Summary of Credit Strengths
        Premium National Tenants: Chipotle, Starbucks, and Aldi provide creditworthy tenant base with long-term lease commitments
Strategic Location: Boston Post Road frontage in affluent Guilford market with excellent visibility and access
Market Fundamentals: 1.1% vacancy rate and zero competitive retail pipeline create exceptional market conditions
Proven Sponsor: Robert Sachs brings 20+ years experience, established construction company, and strong banking relationship
Strong Financial Metrics: 1.54x stabilized DSCR and 10% debt yield exceed minimum requirements
Risk Mitigation: Phased funding structure ties final disbursement to lease-up, reducing construction risk
Relationship Enhancement: Deepens existing $23.5MM relationship with strong deposit history

    

        Next Steps & Timeline
        Credit Committee Approval: Obtain formal approval for proposed terms and conditions
Due Diligence: Order appraisal, Phase I environmental, and title commitment
Documentation: Prepare loan documentation with specified covenants and monitoring
Construction Coordination: Finalize construction timeline and lease-up strategy
Closing: Schedule loan closing upon satisfaction of all conditions precedent

    

This credit analysis is based on information provided as of September 19, 2025.
Market conditions and project parameters are subject to change based on final due diligence.

Document Classification: CONFIDENTIAL - FOR INTERNAL USE ONLY

Loan Amount	$7,000,000
Loan-to-Cost Ratio	77.6% (below 80% maximum)
Stabilized Property Value	$9,333,333 (10% cap rate on NOI)
Stabilized Loan-to-Value	75.0% (at maximum limit)
Equity Investment	$2,025,000 (22.4% of total cost)