The loan will carry an initial term of 36 months with two 12-month extension options, according to Weber. It is interest-only and carries a note rate of 700 basis points over the 30-day LIBOR rate with a floor of 10%. The borrower, who was not identified, will pay an exit fee equal to an amount necessary to provide Arbor with an unlevered 13% IRR, not including any extension fees.
The principals involved in the transaction acquired the property recently with plans to renovate it through a combination of capital improvements, changes in management and a new marketing campaign, according to Weber.
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