NEWPORT BEACH, CA—Locally based private mortgage banking firmMetroGroup Realty Finance has arranged more than$30 million in financing for theacquisition and refinancing ofthree different Southern California properties. The assets totalmore than 194,488 square feet and are located in Laguna Niguel, SanDiego and Pomona, CA.

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The firm provided $10 million in refinancing on a29,382-square-foot medical-office building at25500 Rancho Niguel Rd. in the MissionHospital submarket of Laguna Niguel. The property is ownedand was built in 1992 by the Buie Stoddard Group.MetroGroup provided a 10-year fixed-rate term at 65%loan-to-value.

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“Buie Stoddard Group wanted to take advantage of the recentincrease in value, together with historically low rates, byrepositioning the existing low-leverage maturing loan, saysPat Ward, founder of MetroGroup. “ We drew uponthe strength of the borrower's South Orange County portfolioconsisting of 11 well-maintained and desirable properties totaling750,000 square feet. This allowed us to meet the client's needswhile securing a highly competitive rate.”

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MetroGroup also provided $10 million in refinancing for4S Ranch Village Shopping Center, a30,606-square-foot, shadow-anchored neighborhood shoppingcenter in San Diego also owned by Buie Stoddard Group. Theloan provided replaced the existing maturing loan MetroGroup hadpreviously provided in 2004 for a 10-year, fixed-rate term at a 63%loan-to-value.

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Ward says even thought this was a well-performing asset, withhistorically strong occupancy in an affluent North San Diegoresidential community, a challenge arose when examining the currentphysical occupancy of the center. Due to delays in permitting andgovernment approvals, a key tenant would not be in occupancy atfunding.

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“Even with an abundance of capital in the market, prudentlenders remain careful in due diligence,” says Ward. “Understandingthis, we conducted and presented a thorough survey of theproperty's submarket to highlight its competitive advantages, aswell as Buie Stoddard's deep experience as an owner and operator. Asplit funding was structured to the satisfactionof both lender and borrower.”

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Ward says that the firm's “refinance activity is increasing dueto a dominant trend facing our industry, which is the upcomingspike in commercial loan maturities beginning in 2015.” TheMortgage Bankers Association forecasts a 72%increase from 2014 to 2015 in commercial and multifamily loanmaturities by non-bank lenders, and an additional 34% increase from2015 to 2016.

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Lastly, Metrogroup provided $11.5 million in acquisitionfinancing at a fixed rate of 4.5% for a five-year-term, at a 70%loan-to-value, to investors Bill and Carolyn Kleinfor the acquisition of Garey Tech Center, a134,500-square-foot office building at 2771 N. GareyAve. in Pomona occupied by UnitedTechnologies. The buyers were represented by MikeHartel and Mike Bouma of VoitReal Estate Services, while the seller, LincolnProperty Group, was represented by ClydeStauff of Colliers International.

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“This office building was especially attractive to our clientbecause of its location within the city of Pomona's newly approvedcorridor-specific plan,” says Ward. The plan supportsredevelopment of approximately 1,095 acres in thecity and includes approved residential zoning forfuture development. “The plan is likely to result in improvedproperty values throughout the city, making this a stronginvestment opportunity as well as a secondary exit strategy for ourclient.”

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He notes that the transaction was also unique because it was thesecond property in a two-part acquisition. “We were tasked withhelping the client complete a 1031 exchange in acquiring multipleproperties. We had recently provided financing for the client'sacquisition of a Kaiser Permanente office propertyin Anaheim, CA. By working efficiently to arrange this acquisitionfinancing for the Pomona property, we helped the client to completethe 1031 exchange transaction successfully within the allottedtimeframe.”

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Carrie Rossenfeld

Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.