LAS VEGAS-A new healthcare-related project here and asingle-tenant retail property have been financed in two recentlyclosed loans, with the single-tenant financing managing to close in30 days from start to finish despite some unusual twists. Thehealthcare project loan included $6 million in construction andpermanent financing via Newmark Realty Capital Inc. for ato-be-built 38-room, 28,870-square-foot freestanding transitionalrehabilitation facility here. The other was a $5.5 millionrefinancing provided by Los Angeles-based Dominion Mortgage Corp.and Dominion America Realty Advisors on a single-tenant retailbuilding and an associated long-term leasehold interest inReno.

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The rehabilitation facility is leased to a single-tenantoperator on a long-term basis. Upon completion, it will be one ofseveral operated by the tenant in the region. The facilities aredesigned for patients recovering from acute health problems such asmild strokes and hip replacements.

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The developer was represented by Demetri Koston, and ChrisFunai, both vice presidents at Newmark, who arranged the financingthrough a bank. In addition to securing the construction loan, theNewmark VPs arranged a mini-permanent loan to take out theconstruction loan upon project completion. Other specific terms ofthe loan were not disclosed.

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In the deal arranged by Dominion Mortgage Corp., which is asubsidiary of Dominion Corp., Dominion provided the funding forwhat it calls a unique transaction, which entailed wrapping theexisting first trust deed of $3.7 million with additional mezzaninedebt of $1.8 million. The borrower, a California-based family-ownedtrust, acquired the 15,067-square-foot, single-tenant building in2004. The structure was originally constructed in 1991 and iscurrently leased on a long-term, NNN basis to a national,investment-grade retail chain.

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A challenging twist to the financing was that the building wasconstructed over a public highway in airspace that is leased fromthe Nevada Department of Transportation, thereby creating theunique double-leasehold nature to the transaction. The borroweracquired the leasehold interest to the airspace as part of thebuilding purchase.

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Dominion executive vice president Keith Olson, who structuredthe complicated transaction, noted that the short-term financingdoes not have any pre-payment penalty, nor does it require anyimpounds for taxes or insurance. The loan carries a fixed-rate of12%, interest-only, through 2013 and includes extensionoptions.

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The financing provides the borrower cash-out funds to acquire anadditional investment as well as considerable time to sell thisproperty. The borrower is a sophisticated investor who maintains aportfolio of approximately 300,000 square feet of retailproperties, all on the West Coast.

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“We were able to meet the client’s time frame by closing in 30days, thereby allowing the borrower to pull-out cash needed foranother investment elsewhere,” commented Olson. “The new loan alsoleft the borrower with the flexibility to sell the Reno property tothe strongest buyer when the right opportunity presents itself overthe next few years.”

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