SANTA ANA, CA-Leed Properties of Beverly Hills has refinanced a 225,000-sf flex office building for $21.7 million and taken cash out to develop further at the site in a loan arranged by Buchanan Street Partners. The property is at 1505 E. Warner Ave. and is 100% occupied.

Leed will apply a portion of the loan to develop a build-to-suit project on 1.3 acres at the site that will be occupied by a credit tenant that is a subsidiary of a Fortune 500 company, according to Buchanan Street. The new development will include a 9,500-sf office building with 50,000 sf of outside storage space.

The new financing arranged by Buchanan Street included defeasance of an in-place permanent loan, allowing the sponsors to generate significant cash out for future development and investments as well as to lower their interest payments. The new loan was priced below 6% and provided funds on an 80% loan-to-value ratio.

In addition to the 80% funding and the lower interest rate, the deal does not require any up-front tenant improvements or leasing commission reserves, and it requires minimal other reserves. Buchanan had previously advised on the acquisition and permanent financing for the building, which benefits from what Buchanan calls "a tight Santa Ana office market." Market reports show the direct office vacancy at 8% or less in Santa Ana, with an overall availability of less than 10%.

The Santa Ana property is one of a number of projects that Beverly Hills-based Leed has acquired and/or developed in nearly 35 years. Founded in 1972, the company buys, remodels, repositions and leases properties, with a special focus on infill projects.