SAN ANTONIO-A Houston developer has received $4.39 million from a Wall Street conduit to pay off a construction loan for the 29,000-sf Las Palmas Medical Building. Las Palmas Professional Centre Ltd. had the construction loan from a local bank in place since the building's completion in 2002.
Though medical office buildings and campuses aren't easy to finance due to their narrow niche, Keith Van Arsdale, director of Dallas-based BMC Capital LLC's southwest operations in Houston, says the 4610 E. Southcross Blvd. building in the southeast submarket didn't present specific problems. "The loan could have been challenging because of the specialty nature of the product," the loan's arranger explains. "But due to the experience of the borrower, the quality of the tenants and strength of the leases, this borrower could secure the loan."
At the time of the loan, the building was 92% occupied with four national medical-service providers holding 10-year leases. The long-term leases, combined with strong tenant improvements incorporated by the borrower, also attracted positive attention from lenders. "All of that definitely made it easier to secure aggressive financing for the borrower," Van Arsdale says. The 10-year non-recourse loan was cleared with a fixed rate slightly above 6% and a 30-year amortization.
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