Not an hour passes without a Web-based real estate company trying to stir up publicity for its Internet-age products. As a result, most real estate reporters and columnists like me have become quickly jaded – it takes a lot to impress us.

Well, today, I’m impressed. CyberLoan.com said its online loan application and submission real estate was used by a New York City developer to secure a $17.9 million loan on the purchase of raw land in Texas.

What makes this newsworthy? Two things. First, the loan is believed to be the largest commercial real estate loan to date sourced via online technology. And second, the entire process, from application to closing, took just six weeks.

Like a lot of other online loan services out there, the company’s CyberLoan R/E allows companies to complete a loan application, which then is reviewed by multiple lenders. Citing competitive reasons, neither the borrower nor the Texas-based lender wanted to be identified.

In this case, the borrower submitted a loan application on Feb. 14. Approval was received on March 9, and the deal closed on March 23.

What makes this so amazing is that, in this active real estate market, even home loans often cannot go from initiation to close in less than two months.

“While not a huge lending organization, the bank that funded this $18 million loan was able to compete with larger lenders because of the access-to-deal flow provided by CyberLoan R/E and the system’s built-in cost efficiencies,” said Spencer Kluesner, CEO of CyberLoan.com. “And the borrower was able to quickly secure financing for raw land, typically among the most difficult real estate transactions to fund.”

The nearly $18 million loan was used to purchase 329 acres in Denton County, Texas, just north of Dallas. The lender said the development company plans to build a multi-use commercial property, including a retail center and an office complex.

In other news, a celebrated real estate law suit featuring the exotic and unusual finally has come to an end. The Roosevelt Hotel Corporation, which is owned by Pakistan International Airlines and Prince Faisal of Saudia Arabia, has prevailed over Letoh Associates, a Milstein family partnership, in a lawsuit over the purchase of the Roosevelt Hotel.

The Milstein family leased the Roosevelt Hotel to the Roosevelt Hotel Corporation in 1979 with the irrevocable option to purchase the hotel for $36 million. When the Roosevelt Hotel Corporation exercised its option to buy, the Milsteins demanded an additional $23 million to satisfy mortgage indebtedness. The Roosevelt Hotel Corporation filed suit claiming breach of contract.

New York Supreme Court Justice Ira Gammerman sided with the hotel operator, ruling that the purchase contract clearly stated that the Roosevelt Hotel Corporation was entitled to a fixed-price purchase of the hotel, and was not responsible for $23 million in mortgage indebtedness.

In fact, the judge had some severe words for the Milstein family, saying that the lawsuit “was simply the culmination of Letoh's [Milsteins'] post hoc efforts to discover and exploit a colorable loophole.”

Although the option price for the Roosevelt Hotel, located at Madison Avenue and 45th Street, is set at $36 million, its present value is estimated to be many times that amount. Which explains the Milsteins’ reluctance to let go of their building. But all’s fair in love, war and real estate contracts.

Published: June 2, 2000

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Editor's Note: This article reflects the opinions of Lesley Hensell only and not necessarily the views of this or any other publication, organization or Website owner.