Sacramento CBD Recovers at Slower Pace Than Suburbs

The asset at 1401 El Camino Ave. was one of two office properties to receive funding.

SACRAMENTO—Even with the wide availability of capital in the market, many lenders are exercising extreme caution when it comes to financing smaller deals, especially in secondary markets such as Sacramento. The Sacramento CBD market was hit harder during the recession and has been slower to recover, making it difficult to secure financing for lower-priced assets here.

Presenting an additional obstacle in a recent funding transaction, two office assets were highly distressed and vacant. Continental Funding resolved this by pooling the two distressed office assets with a stabilized retail asset, leveraging the stabilized asset to secure the necessary financing at a loan-to-value rate of 65%.