HOUSTON--Q10 KDH has closed a $2.775 million 3-year fixed rate loan for the One Northchase Park office building located in northwest Houston. The 80s-era vintage class B office building was 50 percent occupied at closing.

“The real key for the buyer was the value he knew could be added,” Travis Fite, vice president at Q10 KDH, told GlobeSt.com. “The buyer had been looking for value-add opportunities, as are other investors, but they are sometimes difficult to find. This was an off-market deal that a broker knew would be a good fit for our buyer-borrower.”

The deal also had another unique aspect, says the firm: The funding source was a correspondent life insurance company placed through a bridge affiliate.

“Typically, most bridge-lenders make loans off of their own balance sheet,” says Fite. “This one partnered with one of our life company lenders to fund from their balance sheet. This program has been around for a little over a year and we have found it effective for non-recourse bridge financing. Buyers looking to finance a value-add property would usually go to a local bank in a full recourse scenario. Our correspondent lender, however, was able to provide this loan without a personal guarantee from the buyer.”

He also views the deal as being analogous to the Houston market as a whole.

“The perception is that the Houston market remains very strong and has many investment opportunities,” says Fite. “Positive job growth, number of relocations, diversification and more prove that Houston continues to be a key growth market. Commerical real estate loans continue to be a large portion of life insurance companies' portfolios and Houston is certainly a viable market in which to place those funds. We have many clients still looking for property although they're finding little upward pressure on cap rates.”