Healthcare

Our client had purchased the single-tenant medical laboratory/office building in 2006, at the top of the market. Subsequently, the tenant folded operations and vacated during the downturn. Our Sponsor re-leased the subject to a regional medical group for office and laboratory use. Because of the high leverage, special purpose use, non-standard parking and regional credit, proceeds were insufficient to cover the ballooning pay-off. GSP analyzed the tenant’s use of the building, industry growth and credit, to demonstrate that the Medical Group Lab Space used much less parking than a standard office building to solve the parking shortage. Our research also showed that the current use was “mission critical” for this operation and generated income far in excess of the cost of operation. A fixed-to-float loan structure, in conjunction with a base-rent bump will allow for an increase in loan proceeds in five years. Fixed for five years at 4.0%, the non-recourse loan will roll to a LIBOR based floater for the final five years of the term. Sized to 75% of current value, the loan amortizes over 30 years.