Since 1992, I’ve been attending weekday broker tours—what San Francisco agents call the Tuesday Tour. In other markets it’s known as a realtor caravan or an internal office tour. Regardless of the name, the purpose is the same: agents learn the inventory, investors spot opportunity, and seasoned professionals quietly assess what others miss.

As a loan officer with an active real estate license early in my career, I didn’t just tour properties—I evaluated financing feasibility. Residential, commercial, mixed-use—it didn’t matter. If a deal had challenges, I wanted to understand them.

One Tuesday, that curiosity led me into a mixed-use building most lenders would immediately avoid.

Two Strikes Before the First Question

Upstairs: a Single Room Occupancy (SRO)—a residential hotel-style property with shared kitchens and bathrooms.
Downstairs: a bar and restaurant.

Individually, each use makes lenders uncomfortable. Together, they’re often considered unfinanceable—even for experienced operators with strong financials and clean P&Ls.

The restaurant (we’ll call it Mabel’s Clam House) was popular and well-known. But this was a down commercial real estate cycle. Values had dropped nearly 50% from peak. What looked like a “deal” on paper was, in reality, a property most investors—and nearly all lenders—would pass on.

“What Do You Think? Can This Be Financed?”

Two commercial brokers I respect deeply, Mike and Cliff, were hosting the open house. I was one of the only professionals who walked in that morning.

After their overview, they asked the question that matters most in commercial real estate:

“What do you think? What can you arrange for financing?”

I was honest. Large banks wouldn’t touch it unless the borrower was a private-wealth client. Out-of-area lenders wouldn’t understand the asset. But I did know a few local San Francisco banks that might consider it—under the right narrative, with the right borrower, at the right time.

I told them I was a phone call away.

The Offer Comes In… and Then the Panic Sets In

Days later, an offer was accepted. The celebration was short-lived.

The buyer, Ken, and his agent, Angie, were both capable professionals—but new to commercial investment real estate. They had no lender. No plan. And deadlines were approaching fast.

Angie had been calling Korean banks in Southern California. No interest. No callbacks. No solutions.

Meanwhile, the listing agents were staring at contingencies, timelines, and the very real possibility of a cancelled contract.

The Real Work Begins: Borrower + Property + Narrative

Ken was a successful sushi restaurateur nearby. Strong income. Solid business history.

But:

  • Limited real estate ownership
  • Partial down payment from a home equity line of credit
  • No experience owning investment property
  • A master-leased building structure
  • A negative P&L

On paper, this is where most lenders stop returning calls.

But commercial lending isn’t about checklists—it’s about story, structure, and appetite.

We framed Ken not as a speculative investor, but as an experienced operator expanding into an asset class aligned with his expertise. The restaurant component became the anchor. The SRO required nuance—but not panic.

The local bank leaned in. The underwriter visited the property herself.

Closing Day: Keys, Funds, and a Lesson Reinforced

Weeks later, documents were signed. Funds were in escrow. Angie handed Ken the keys.

Was it luck? Not really.

It was knowing which lender’s appetite matched the moment, understanding how to present risk intelligently, and having the patience to navigate complexity when others walk away.

That’s how challenging commercial real estate loans get closed—especially in San Francisco.

🔎 BROKER’S EDGE – Smarter Real Estate Lending
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📞 Steven Hook | Residential & Commercial Mortgage Broker

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This content is provided for informational purposes only and is not a loan commitment or guarantee of financing. Loan programs, rates, terms, and conditions are subject to change and borrower qualification. Individual results may vary.

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