1Deal Overview

2Scenario Analysis

3Stakeholder Lenses

4Executive Summary

Step 1 of 4 · Deal Overview

Review deal materials and confirm project context

Upload supporting documents and confirm key deal parameters before scenario work begins. All materials remain internal to this review session.

ⓘ Demo scenario pre-loaded: Koko'olau Village — a 142-unit mixed-use development in Kailua, O'ahu with a $32M financing request.

Upload supporting materials

Credit brief, financial statements, appraisal, environmental reports, proforma

⇧

Drag files here or click to browse

PDF, XLSX, DOCX · Max 50MB per file

📄Kokoolau_Village_CreditBrief_v3.pdf✓

📄Proforma_FY25_Assumptions.xlsx✓

Deal parameters

Confirm key figures for this review session

Project Name

Koko'olau Village

Asset Type

Mixed-Use CRE

Total Project Cost

$48.5M

Financing Request

$32.0M

LTV at Request

66.0%

Market

Kailua, O'ahu

Loan Term

5-year

Est. Completion

Q3 2027

Project summary

Synthesized from uploaded credit brief — for internal alignment only, not a legal or underwriting document

Koko'olau Village is a proposed 142-unit mixed-use development in Kailua comprising 110 market-rate residential units, 32 affordable units at 80% AMI, and 18,000 sq ft of ground-floor retail. The sponsor, Pacific Kai Development Group, has completed two comparable projects in Honolulu since 2019. The project site is controlled under a 75-year ground lease with the state. Construction financing is requested at $32M with a planned take-out via HUD 221(d)(4) or permanent refinance at stabilization. Entitlements are pending final DPP review; environmental clearance received June 2024.

Mixed-Income Housing Entitlement Risk Experienced Sponsor Ground Lease Structure Kailua Submarket CRA Value

Step 2 of 4 · Scenario Analysis

Adjust assumptions and observe strategic implications

Sliders represent key variables in this deal's financial and operational profile. Use scenario presets or adjust individually. Outputs update in real time and reflect strategic interpretation — not underwriting conclusions or credit decisions.

Financial assumptions

Deal-level financial variables

Residential occupancy at stabilization

92%

Expected lease-up rate at stabilization. Below 88% typically signals elevated absorption risk in this submarket.

Retail absorption (% of NRA leased)

75%

Proportion of 18,000 sq ft retail leased by stabilization. Ground-floor retail in Kailua has faced slow absorption since 2021.

Construction cost variance

+8%

Percentage above base proforma budget. Hawaii construction inflation averaged 9–12% annually in 2022–2024.

Months to stabilization

18 mo

Time from construction completion to stabilized operations. Affects bridge period carry costs and liquidity exposure.

Market and structural assumptions

External and deal-structure variables

Prevailing interest rate assumption

6.8%

Rate environment at permanent financing. Each 50bps shift meaningfully affects take-out feasibility and DSCR.

Cap rate at stabilization

5.2%

Exit or valuation cap rate. Mixed-use Kailua assets have transacted between 4.8–5.8% in recent cycles.

Affordable unit compliance complexity

Moderate

Operational overhead of maintaining 32 units at 80% AMI under HPHA/HUD requirements. Higher complexity reduces NOI and DSCR estimates.

Entitlement delay risk

Moderate

Probability-weighted time impact of pending DPP entitlements. Higher risk extends the bridge period and increases carry exposure.

Scenario output — strategic interpretation

Based on current slider values. These outputs support internal discussion — not underwriting calculations or credit approval indicators.

Est. stabilized NOI

$2.84M

Base case — moderate confidence

DSCR estimate

1.22x

Above 1.20x threshold

Carry risk exposure

$3.1M

18-month bridge period

Sensitivity — what moves most

Occupancy rate

High

Interest rate

High

Construction cost

Medium

Retail absorption

Medium

Timeline / entitlement

Lower

Base case assumptions produce a deal that clears minimum DSCR thresholds with limited headroom. The primary strategic question is whether the construction timeline and retail absorption assumptions are sufficiently conservative given current Kailua market conditions. Entitlement completion timing is the single largest schedule variable.

Step 3 of 4 · Stakeholder Lenses

How each department views this deal

Internal decisions involve more than financial metrics. This section surfaces how each department's mandate, risk tolerance, and operational priorities shape their interpretation of the same deal. Click any card to expand.

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Credit & Risk

Primary approval lens

Credit will focus on DSCR headroom, LTV at various stress scenarios, and the reliability of the take-out assumption. The ground lease structure and pending entitlements are the two issues most likely to trigger additional due diligence or covenant language. The affordable unit compliance obligation may also require a separate operational risk assessment before the deal advances.

DSCR headroomGround lease title riskEntitlement statusTake-out certainty

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Relationship Management

Sponsor and market context

RM will advocate for the sponsor's track record and the long-term relationship value of this deal. Pacific Kai Development Group has a clean two-project history with the bank. RM's primary concern is that internal process timelines don't create competitive disadvantage — other regional lenders are already in active review.

Sponsor relationshipCompetitive timeline pressureRepeat borrower

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Treasury & Capital Planning

Balance sheet and liquidity fit

Treasury will evaluate this deal's fit within current portfolio concentration limits, particularly CRE and construction exposure. At $32M, this is a meaningful balance sheet item. Whether to hold on balance sheet or syndicate is likely to surface early. Duration mismatch between the construction period and current funding mix is also relevant given the rate environment.

CRE concentration limitsDuration mismatchSyndication candidate

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Legal & Compliance

Structural and regulatory review

Legal will need to review the ground lease structure carefully — a 75-year state leasehold creates lender priority questions and potential complications in a default scenario. The affordable housing compliance obligation under HPHA/HUD guidelines requires specific loan covenant language. Fair lending documentation must be current given the mixed-income component.

Leasehold lender rightsFair lending docsHUD covenant languageAffordable unit structure

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Operations

Servicing and monitoring capacity

Operations is primarily concerned with draw schedule management during construction and the monitoring capacity required for a mixed-income project with HUD compliance obligations. The retail component adds a second lease-up monitoring track. The deal is within normal servicing bandwidth but would benefit from a dedicated monitoring plan at closing.

Draw schedule complexityDual lease-up trackingWithin servicing capacity

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Executive Leadership

Strategic fit and community context

Executive leadership will weigh this deal against the bank's community development commitments, CRA activity, and competitive positioning in the Hawaii housing market. The affordable component meaningfully strengthens the CRA narrative. The ground lease structure and entitlement risk are the two issues most likely to prompt executive-level questions before committee.

CRA credit valueCommunity housing alignmentReputational risk if delayed

Step 4 of 4 · Executive Summary

Internal discussion brief

Generated from the deal parameters, scenario assumptions, and stakeholder considerations entered in this session. For internal alignment and executive discussion only — not a credit memo, underwriting opinion, or approval recommendation.

Koko'olau Village — Strategic Review Brief

Mixed-Use CRE Construction · Kailua, O'ahu · $32M Financing Request

Prepared via ClearPath
Internal use only

Deal at a glance

Total project cost

$48.5M

Financing request

$32.0M

LTV at request

66.0%

Scenario DSCR

1.22x

Strategic interpretation

Under current scenario assumptions, this deal presents a viable but tightly structured opportunity in a supply-constrained submarket. The base case DSCR clears the 1.20x floor with limited cushion. The affordable housing component strengthens CRA positioning and community alignment, while the ground lease structure and pending entitlements represent the primary structural risks requiring cross-functional attention before committee.

Cross-functional considerations for discussion

Credit and Legal should align on leasehold lender rights and default remedies before the deal advances — this is the structural issue most likely to create downstream complexity.
Treasury should confirm whether this deal fits within current CRE concentration limits, or whether syndication should be explored as a parallel track from the outset.
Entitlement status from DPP should be confirmed as a condition precedent — a 30–60 day delay materially affects the construction draw schedule and carry exposure.
The affordable housing component represents meaningful CRA value and may warrant proactive communication with community development teams to document impact at origination.
RM should be prepared to address the competitive timeline — another regional lender is in active review, which creates a window-of-exclusivity question for committee.

Suggested discussion prompts for committee

Is the ground lease structure something our credit policy can accommodate as written, or does it require a policy exception or additional credit enhancement?

Credit & Risk · Legal & Compliance

At what occupancy rate does this deal fall below our DSCR threshold — and does the sponsor have a contingency plan if residential absorption is slower than projected?

Credit & Risk · Relationship Management

Given current CRE concentration levels, does this deal fit within portfolio limits, or does it require a formal concentration review before committee?

Treasury & Capital Planning · Executive Leadership

What does the CRA credit analysis look like for this deal, and has community development been consulted on the affordable unit structure and compliance requirements?

Executive Leadership · Legal & Compliance