HOUSTON-A local partnership has obtained $10 million in permanent financing for the 162,233-sf West Oaks Plaza. The loan caps a two-year investment into a turnaround that has produced a 90%-leased property.
"They wanted to take advantage of a lower interest rate," says Paul Gardaphe, president and COO of iCap Realty Advisors in the Woodlands, TX. "The owner had leased up the space since the acquisition, got out of their acquisition loan and recouped their investment dollars." Borrower of record West Oaks Plaza Ltd. refinanced the 12-year-old center at 2703 Texas 6 S. through the New York City-headquartered Morgan Stanley Mortgage Capital.
The center's location was impressive to lenders because it is located across the street from the 1.1-million-sf West Oaks Mall in the fast-growing Energy Corridor submarket. Despite the location and borrower's strong track record, Gardaphe tells GlobeSt.com that the loan was somewhat difficult to place due to the lack of a major anchor and the tenant base, comprised mainly of locally owned shops. "In that size of a center, many lenders like to have major national tenants in there," he adds.
However, the lead tenant Bollywood Cinema, which shows first-run imported movies from India, made a favorable impression on the lender. "That's a target market theater and the guy who owns those is doing great," Gardaphe says. "Everyone is happy with him."
Gardaphe says Morgan Stanley too was impressed with the borrower's past record and Bollywood. As a result, the lender cleared a 71% loan-to-value package with a 10-year term, 6.29% fixed-rate interest and 30-year amortization.
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