Office

George Smith Partners arranged the $37,000,000 non-recourse first mortgage from a regional commercial bank on a Class A multitenant office building in a suburban Southwest submarket. Although the property is currently 97% occupied, the largest tenant (17% of total space) had an expiring lease to be renewed prior to loan closing and an additional 50% of the leased square footage will roll within the three year loan term. Loan proceeds are structured as an initial $34,392,000 loan, with a further $2,608,000 to be funded within six months of closing for tenant improvements and leasing commissions related to the largest tenant. The loan requires no additional leasing reserves, and interest is not paid on the $2,608,000 until drawn. The 67% of purchase price first mortgage priced at one-month LIBOR plus 2.60% and required a LIBOR cap with a 3.00% strike price for the first two years of the term with a renewal for the third year, thereby reducing the overall cap cost to Borrower by shortening the cap’s duration. The three-year term is interest only for the first 24 months and requires principal and interest payments at a 25-year amortization schedule for the remaining term.