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.

"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 "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."

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.

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.