HUNTINGTON BEACH, CA-The owner of a 31-suite office building here has landed $6.5 million in financing that is designed to accommodate the conversion of the suites into office condominiums, according to NorthMarq Capital. Ory Schwartz in the Newport Beach office of NorthMarq tells GlobeSt.com that the loan terms provide that, as the property is converted to office condominiums, individual units may be released from the collateral if the loan is paid down accordingly.

Schwartz arranged the financing of $6.5 million for the purchase of the property, which is a fully leased office building at 18377 Beach Blvd. The lender is a local bank and the borrower is a Northern California-based private investor.

The interest-only, fixed-rate loan carries a two-year term, with a six-month extension option. The 31 suites at the 42,500-sf building range from 689 sf to 3,636 sf.

The building was constructed in the 1980s, and the borrower bought it recently for approximately $9.35 million. The seller was a private investment group.

As the owner of the office building sells units, Schwartz explains, the loan will be paid down according to a formula based on the size of that unit in relation to the total square footage of the property. Another feature of the loan is that, as units sell, the loan is paid off at greater than a one-to-one ratio, meaning the entire loan can be repaid before all of the units are sold.