SAN FRANCISCO—The owners of DRAKE Gastro Lounge recently acquired a building located in the South of Market area of San Francisco with a 20-year fixed-rate, SBA 504 loan for $4.3 million. According to TMC Financing, DRAKE was able to recoup more than $2,000 a month by purchasing their location, as well as fixing their operating expenses against future lease rate inflation.
The two-story restaurant, bar, and lounge occupies a 9,900 square foot building located at 508 Fourth Street in San Francisco. The financing enabled the minority owned and operated business to hire new employees and retain working capital through a low down-payment, says TMC.
The San Francisco rental market is becoming increasingly competitive with rates soaring to record highs. With rental prices sky rocketing, many business owners are capitalizing on the advantages of owning the property, rather than leasing, says TMC.
In just the last three years, the company says, rental rates have increased 75%. “By owning the property, business owners can manage large expenses like labor and occupancy. DRAKE was able to recoup more than $2,000 a month by purchasing their location, as well as fixing their operating expenses against future lease rate inflation,” TMC says
By utilizing the SBA 504 loan program, monthly real estate expenditures were fixed and reduced, explains Kingston Wu, co-owner of DRAKE and principal at Brixton Restaurant. “As investors, purchasing this real estate diversifies our investments and reduces our risks.”
Bruce Whitaker, SVP of business development at TMC Financing, worked with the owners of DRAKE Gastro Lounge to provide financing through the SBA 504 commercial real estate loan program. The participating third party lender on the project was Stanford Federal Credit Union in Palo Alto.
Check back with GlobeSt.com in the next day or so for an update on this story, with comments from Barbara Morrison, president and CEO at TMC Financing, who tells GlobeSt.com that “In the Bay Area, TMC's clients are also faced with the challenge of low overall inventory and locating (and winning) property to purchase for business use.”
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
