THE WOODLANDS, TX-A South Texas developer has obtained $3.25 million in a partial recourse bridge loan to pay off construction costs and stabilize leasing in the Grogan's Office Building.
The 29,654-sf building at 9400 Grogan's Mill Rd. is 70% leased. "He wants to take it to full occupancy," says John Burke, managing director and senior vice president in Houston for the Minneapolis-based NorthMarq Capital Inc. "The owner anticipates having the thing leased up by the end of this year." The J. Beard Co. LLC, also from the Woodlands, leases the five-year-old, four-story structure for the developer, Interstate Terra Development Inc. of Spring.
Burke tells GlobeSt.com that Silvergate Bank of LaJolla, CA, was the logical choice to underwrite the medium-term, floating-rate loan for many reasons. "Their loan program is designed for those types of properties that are in transition mode, like this one," he says. "That's their forte."
Burke is mum about the loan's details, but acknowledges it is LIBOR-based financing that closed quickly. Similar financing packages have been closing at 300 to 500 basis points above LIBOR, with loan-to-value ratios of 75% to 80%, according to local experts.
Burke says the owner will seek permanent financing when the loan matures. "The property is a long-term investment for him," Burke adds. The loan earmarks a pool of several hundred thousand dollars for the lease-up campaign, he says.
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