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 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."

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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