Primary Capital Brokers Nearly $11M in New Loans

Epic Orlando LLC received a $3.5-million loan from Atlanta-based Cornerstone Bank to fund its $3.85-million acquisition from Pennsylvania-based National Leisure Group of the Cruises Only Building. The 35,000-sf, 45-year-old Downtown Orlando office building is at 1011 E. Colonial Dr. The interest rate will float over the prime with a starting rate of about 7%, Todd F. Cohen, director, Income Property Capital Group in Orlando tells GlobeSt.com.

The loan represented 85% of the total purchase price which equates to $100 per sf. Cohen calls the per-sf price "a significant discount to replacement cost" of a comparable property. The funding deal took 45 days to complete, from application to closing. Epic plans to renovate the property and re-lease the premises to a mix of office and retail tenants.

In suburban Tampa, Primary Capital arranged a $7-million mezzanine loan for a private investment partnership from New York on its $53-million purchase of Allegro Palms. The 452-unit class A condo conversion property is at 3501 Legacy Crescent Pl. in Brandon. MMA Realty Capital of Atlanta provided the funds for the borrower who also had taken out a $45-million first mortgage with another lender. The price equates to about $117,257 per unit.

The total debt ratio on the property, including the mezzanine loan, was 90%. The Brandon loan will float over Libor with a starting rate of about 7%. The funding deal took 30 days to complete, from application to closing. The property was formerly called Alexan at Crescent Place.

Primary Capital has arranged financing totaling $250 million on statewide condo conversion projects in the past 24 months, Cohen tells GlobeSt.com. He sees no immediate halt to the volume of condo conversions taking place in Orlando, Tampa, Jacksonville and Miami.

"With the incredible population and wage growth continuing in the Central Florida area and around the state, the residential real estate markets should be able to continue growing, with some sort of a slow leveling off of the tremendous double-digit price increases growth of the recent past," Cohen tells GlobeSt.com. He adds, "As long as long-term rates stay relatively low, such as under 7.50% mortgages, the conversion market should continue."