The borrower of record is One Macdonald Center LLC, which backfilled part of the space in the 1970s-constructed asset at 1 N. Macdonald St. with US Bank in the lead spot. "This was a nice product, with a good borrower," says Greg Miskovsky, senior director and senior financial associate with Marcus & Millichap Capital Corp.'s Phoenix office.
Miskovsky, who arranged the loan through the New York City-based Merrill Lynch Mortgage Capital Inc., tells GlobeSt.com that there were some small challenges in finding the right underwriter due to the city's size, occupancy level and the structure's age. "It was in lease-up mode while we were doing the loan," he adds.
What tipped Merrill Lynch toward underwriting the loan was the borrower's effort to improve the building, formerly known as Valley National Bank. "He did a really nice job on renovation and got outstanding support from the city," Miskovsky says. "That plus the fact it was a good-quality asset allowed Merrill Lynch to be aggressive on the underwriting."
The 10-year financing, with a 6.4% fixed-rate interest, had a 74.2% loan-to-value ratio and a 35-year amortization schedule. Miskovsky says the loan includes a structured hold-back for $500,000 that will be released when occupancy hits 90%. When the loan was inked, the occupancy was edging up on the benchmark, the loan arranger says.
"I think a loan like this is a product of its environment," Miskovsky says. "I think as cap rates continue to be so aggressive the conduit market will see more creative ways to finance this stuff."
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