George Smith Partners arranged acquisition financing for a single tenant Tractor Supply located in a tertiary northern California market. The property was acquired as one of three properties purchased by a borrower in a 1031 exchange. Although the subject is 100% leased to a national credit tenant, lenders were concerned about the “dark value” given the lease term is inside the 10 year loan termination date and the thin commercial market. 65% leverage was required in order for the Borrower to complete his acquisition of the other two properties in this exchange. The capital provider recently funded a similar transaction for a Tractor Supply and was comfortable with the probability that Tractor Supply will renew at lease expiration. The non-recourse, 5.20% fixed rate loan is amortized over 25 years.
