Rate: 4.375% Fixed for 7 years
Term: 7 Years
Amortization: 30 Years
Prepayment Penalty: 5,4,3,2,1%
LTV: 70%
Origination Fees: 0.50%
Transaction Description:
George Smith Partners secured $6,100,000 for the cash out refinance of a 25,378 square foot owner-user medical office building in Oxnard. Constructed in 1990, this building was recently modernized and is fully occupied. The Borrower was able to rate lock at application an interest rate of 4.375% fixed for seven years. The loan has a 30-year amortization and a 5,4,3,2,1% step down prepayment penalty.
Challenges:
The asset is a 51% owner-occupied medical office building that leased the remaining non-owner occupied suites to specialized medical professionals. The building is one of the premier office buildings in Oxnard and has a true medical tenant base. Given the niche nature of the asset and tenant base, it was difficult to find comparable properties in this sub-market. Further, the owner-occupied suites have rental rates that are slightly above market and were marked-to-market during the valuation process. The Borrower was seeking maximum leverage to recapitalize equity invested in capital improvements as well as pay off an existing SBA loan, thus the valuation of the asset was a critical component to the loan structure.
Solution:
GSP worked with a Capital Source that understood the strength of the asset and the Sponsor as well as the value of the owner-user component. The Lender saw the opportunity to expand the relationship beyond this one financing. Extensive upfront market data was required to fully understand and support the property valuation during the appraisal process due to the lack of comparable assets. GSP was also able to receive approval for a higher LTV than originally negotiated and secure a 2nd trust deed in order to deliver the total commitment amount that was determined in the LOI. Our Sponsor was able to benefit by receiving a very low 7YR fixed rate with the cash-out proceeds projected for their business plan with no leases required for the owner-user suites or any TI/LC Reserves.
Advisors
Related Financings
- No related financings.
