Brea

J. Jay Brooks placed the no-cash-out refinance of a single tenant office building in a secondary Colorado market. The asset is leased to a single tenant for ten years but was only 65% occupied at the time of funding. The tenant will expand into the remaining vacant square footage but will not be paying rent on the additional space until year-end. The $5,000,000 non-recourse loan underwrote to near break-even coverage at funding. The rate is fixed at 5.0% for ten years. There was no hold-back of funds subject to the tenant expansion. Challenge: The existing loan matured and required immediate funding. The Borrower was not willing to process two transactions, initially a bridge loan today and then the permanent take-out once the property fully stabilizes in December/January. A high loan to value relative to life company underwriting was needed at funding to fully take-out the existing capital. Solution: GSP identified a life insurance company with a very flat decision making process who could respond quickly without having to pole committee on underwriting and loan structure. The five-week due diligence from application to funding satisfied the existing lender and allowed us to close in a timely fashion. The LifeCo underwrote the credit of the lease guarantor and was comfortable that they would expand into the remaining vacant space and increase the net cash flow to an acceptable DCR by January 2014.