HOUSTON-The long-time owners of the 380,000-sf Lyric Centre have refinanced it, securing a 10-year loan at a fixed-rate interest. The 70% loan-to-value financing for more than $20 million replaces a note that had run its course.
The 24-year-old Lyric Centre is situated on a little more than one acre on 440 Louisiana St. The asset is 90% occupied, with the tenant base primarily attorneys. Gary Dunkum, principal with Houston-based Live Oak Capital Ltd., says Lyric Centre's smaller floor plates and its proximity to state and federal courts have made it popular among the legal set.
Dunkum, who arranged the loan through Boston-based John Hancock Real Estate Finance Inc., tells GlobeSt.com that local borrower Lyric Centre Enterprises has owned the 26-story building for 15 years. "The old loan became due and they decided to take a new one to the market," he says. Harris County has levied a $28-million assessment on the high rise.
Dunkum says the financing attracted a lot of interest from potential lenders, with John Hancock providing some interesting alternatives including an interest-only, no amortization period, 70% loan-to-value and sub-6% fixed-rate interest--with built-in flexibility to resize the loan. "He can increase the loan amount during the term if he needs more money," Dunkum says. "Those were the things that Hancock offered over the others."
Dunkum says lenders were interested, in part, because the borrower has a good track record. Additionally, the Houston office market continues to be in good shape, with good prospects. He says Lyric Centre is in good shape as well, with the owners having re-skinned it four years ago. "It's now well-positioned for the resurgence of the Downtown market," Dunkum says.
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