SHREVEPORT, LA-One of the city’s few class A buildings has obtained a cash-out refinance from a Texas-based regional bank for $12.2 million.

The 253,743-square-foot Chase Tower, located at 400 Texas St. in downtown, nabbed a fixed-rate, non-recourse loan with a 75% LTV and a 30-year amortization schedule. The interest rate was priced in the mid-5% range. 

A private investor based in Hawaii owns Chase Tower, along with the adjacent 320-space parking garage. According to the Caddo Parish Tax Assessor, the legal ownership entity is Basin Project Inc. Avant Properties LLC manages the 15-story building.

“The borrower bought the property about four years, and when he bought it, it was fairly well stabilized with occupancy in the mid-to-upper 80% range,” says Joseph Hevey, Jr., managing director of Cohen Financial’s Dallas office who arranged the refinance. “Rents were a little depressed at the time, but there’s been a spike in activity due to the natural gas find and with that, the borrower was able to lease up some of the vacancy, renew some of the existing tenants increase rents and cash flow, and ultimately increase the value of the property.”

Indeed, the Shreveport metro area, long-supported by gaming and tourism, has another industry to drive growth – natural gas. Energy companies are actively drilling in the Haynesville Shale, which stretches across East Texas into Northwest Louisiana and parts of Arkansas.

Chase Tower currently is about 95% occupied. JP Morgan Chase Bank anchors the building, leasing 49,750 square feet, or 25% of the building. Other tenants include: Morgan Stanley Smith Barney, Reach Local, two US federal government agencies – Homeland Security and ATF – and several sizeable and well-established regional law firms and energy-related companies.

Hevey tells GlobeSt.com that the lender pool for Chase Tower was limited because Shreveport is considered a tertiary market, and a lot of lenders don’t understand the market. Even so, there were lenders who wanted to do the deal.

“We had five to six lenders that were interested in the deal,” Hevey says. Along with the regional bank that provided the refi, a number of CMBS lenders competed for the deal.

“What’s interesting is that the bank that did the refi is the same one that did the original acquisition loan,” Hevey notes. “That’s rare because most lenders don’t like refinancing their own loans with a take out.”