$10M Loan Gives Second Chance to 201,000-SF Converted Mall

The owner of record Pretty MT LP spun recourse financing into a non-recourse package with a 62.5% loan-to-value ratio, lower interest rate and $1 million for tenant improvements at Richland Pointe, a class B property at 5201 Rufe Snow Dr. in North Richland Hills, Clint Lofman, director of Dallas-based Quantum First Capital, tells GlobeSt.com. He says the Seattle-headquartered Washington Mutual Inc.'s Dallas operations provided the two-year, floating-rate loan, which kicks in with an interest rate of less than 4% and includes a one-year extension option.

The deal closed in less than 35 days although the financing search took five months before the application was placed, Lofman says. "The biggest hurdle was the dark space," he says about the 89.3%-leased building with a 52.9% actual occupancy from four tenants and no large lease rolls this year. He says the owners are negotiating with a tenant to fill the empty space. The new financing, he says, "gives them some time."

Lofman says the proposal was floated to 20 lenders. "Lots said they'd do it," he recalls, "but Washington Mutual was the most aggressive and achieved most of what these guys wanted to do." One of the objectives was to keep the debt service at the same level or even shave it a bit, he says, adding the new deal provided the same coverage for a 22-year-old building assessed at $7.4 million by Tarrant County. "We basically got them what they wanted," he stresses. The ownership is made up of Provident Realty Advisors of Dallas and William E. Simon & Sons, with offices in California and New Jersey.