Cohen Financial, which arranged the loan, says the 70% financingincludes an additional $2-million earn-out upon stabilization ofthe property, which is approximately 77% leased. The interest rateon the loan is 225 basis points over the 30-day Libor. The firsttwo years of the loan are interest-only. The proceeds paid off theprevious debt on the property and then some.

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"We funded it about 90 days ago; today the spread would be 350points and you wouldn't get that kind of leverage," CohenFinancial's Paul Schroeder tells GlobeSt.com. "This is a real dealwith cash out, an increased loan amount, an earn out; it's notsomething for every transaction but in today's world, with BARTnearby, wonderful parking and good management, we're going to doit."

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The greatest obstacle was the 22% vacancy, due to a large lawfirm that recently relocated. But ultimately it wasn't that toughto overcome, Schroeder says.

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"The property has the suburban building characteristics that[the lender] believes in the long run will help it outperform themarket," he says. "It's an A borrower, an A location, and there'scash in the deal; [the lender] is not going out on the limb veryfar."

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Cohen Financial's Loan Administration platform is servicing theloan. The firm recently gained a select servicer ranking fromStandard & Poor's Rating Agency.

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Pacific Eagle Holdings Corp. acquires prime office buildings andhotels nationwide for its own account. 500 Ygancio is the onlySilicon Valley property listed on its Web site. In San Franciscoproper, it owns 150 Spear St. and 353 Sacramento. In Los Angeles,it owns 888 W. Sixth St. It also owns 250 Franklin in Boston.

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Its parent company, Great Eagle Holdings, is a publicly tradedglobal real estate holding company with real estate assets inexcess of $4 billion. Among Great Eagle Holdings' assets is theTwin Tower Citicorp Plaza in Hong Kong, the landmark Langham HiltonHotel in London, the Sheraton Tower Southgate in Melbourne,Australia, The Renaissance Hotel in Toronto, Canada. In addition,it is developing a two-million-sf mixed-use commercial complex inthe heart of Mongkok, the busiest retail district in Hong Kong.

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