Foothill Locks in Fixed Rate for 97,000 SF

Ory Schwartz of NorthMarq's Newport Beach regional office, who arranged the financing with partner Richard Scandaliato of the NorthMarq Newport Beach office, tells GlobeSt.com that the fixed-rate loan replaces a lower-leveraged financing that was in place when the borrower bought the property in 2003. The three buildings are located at 2054-2094 Redlands Blvd. and were built in 1991. The fixed-rate loan was based on a 10-year term with a 30-year amortization schedule and was arranged for the borrower with Lehman Bros. at what Schwartz describes as "a competitive rate." He says a NorthMarq analysis showed that it made sense for the borrower to pay off the existing loan, even though it meant paying a yield maintenance penalty, because capital is readily available to finance 100% occupied retail properties and the CMBS loan that the borrower was paying off did not carry a defeasance penalty. The buildings that secure the loan occupy a site of nearly eight acres within a larger shopping center that is shadow-anchored by Wal-Mart. The three buildings are occupied by 20 tenants, including anchors Food 4 Less and Anna's Linen Co. The refinancing of the retail buildings was one of two closed recently by Schwartz in Southern California. In the other transaction, which Schwartz arranged with Mike Elmore of NorthMarq's Newport Beach office, Alisal Oaks LLC obtained a Freddie Mac first mortgage of $6.4 million for the 80-unit Alisal Oaks Apartments at 543 Amber Way in Solvang, a complex composed of nine two-story apartment buildings totaling 62,580 sf. The property occupies a 3.3-acre site and was 98% occupied at the close of the loan, which was based on a 10 plus one-year term with a 30-year amortization schedule.