Refi Bank Loan Mimics CMBS

LOS ANGELES—Local investor WJM LLC has secured a $15.7 million first mortgage debt loan to refinance Jewelry Mart, a 12-story, 110,000-square-foot retail and office building located in Downtown Los Angeles’ jewelry district. WJM came to Quantum Capital Partners with a tall order: the benefits of a CMBS without the disadvantages of a CMBS loan. The solution was to secure a bank loan that mimics a typical CMBS loan.

“The borrower wanted low interest rate, non-recourse debt, but they didn’t want all of the cost reserved property reports and pre-payment penalties that a CMBS loan has,” Quantum Capital managing director Jonathan Hakakha tells GlobeSt.com. “We got everything that a CMBS loan has without all of the negatives of a CMBS loan.” The final loan had a low 10% recourse with a 10-year term, a 4.5% interest rate and a flexible prepayment schedule. The loan was underwritten at 70% loan-to-value.