SAN FRANCISCO—The owners of DRAKE Gastro Lounge recentlyacquired a building located in the South of Market area of SanFrancisco 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 fixingtheir operating expenses against future lease rate inflation.

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The two-story restaurant, bar, and lounge occupies a 9,900square foot building located at 508 Fourth Street in San Francisco.The financing enabled the minority owned and operated business tohire new employees and retain working capital through a lowdown-payment, says TMC.

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The San Francisco rental market is becoming increasinglycompetitive with rates soaring to record highs. With rentalprices sky rocketing, many business owners are capitalizing on theadvantages of owning the property, rather than leasing, saysTMC.

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In just the last three years, the company says, rental rateshave increased 75%. “By owning the property, business ownerscan manage large expenses like labor and occupancy. DRAKE wasable to recoup more than $2,000 a month by purchasing theirlocation, as well as fixing their operating expenses against futurelease rate inflation,” TMC says

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By utilizing the SBA 504 loan program, monthly real estateexpenditures were fixed and reduced, explains KingstonWu, co-owner of DRAKE and principal at BrixtonRestaurant. “As investors, purchasing this real estatediversifies our investments and reduces our risks.”

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Bruce Whitaker, SVP of business development atTMC Financing, worked with the owners of DRAKE Gastro Lounge toprovide financing through the SBA 504 commercial real estate loanprogram. The participating third party lender on the projectwas Stanford Federal Credit Union in PaloAlto.

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Check back with GlobeSt.com in the next day or so for anupdate on this story, with comments from Barbara Morrison,president and CEO at TMC Financing, who tells GlobeSt.com that “Inthe Bay Area, TMC's clients are also faced with the challenge oflow overall inventory and locating (and winning) property topurchase for business use.”

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Natalie Dolce

Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, 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.