Single-Tenant Asset Fetches North Of $15M

"We went through 13 banks, trying to get a reasonable loan," explains Marcus & Millichap Real Estate Investment Services' Andrew Slade, an associate with the company's San Diego office. "The spreads were simply too high," adds Slade, who represented the buyer in obtaining the asset at 6725 Odyssey Dr.

Slade, who partnered with Marcus & Millichap's associate vice president Joshua Volen on behalf of the buyer says in-house Mark One Capital stepped up, providing a 10-year, 4.57% interest loan with a 30-year amortization. "The best rate we had quoted from others was 6.5%," Slade adds. Chad O'Connor, associate director of Mark One Capital in San Diego, spearheaded the funding transaction.

Slade acknowledges the sour market had a lot to do with lender caution, as did more stringent lending requirements. He also allows there could have been language in the lease that might have provoked some lender wariness, though "nothing that would really be a problem in a stronger market," he notes.

Science Applications International is headquartered in La Jolla, CA. The company moved into its Huntsville location upon the building's completion in 2007, with a 12-year, triple-net lease. Slade says the company is paying an estimated $1.05 per square foot.

Slade tells GlobeSt.com that the San Diego-based HPC made its entrance into the Huntsville market with this acquisition. He says the buyer used 1031 exchange money from the sale of two properties in Southern California, and liked that the building had a signed lease in place and was close to Cummings Research Park.

"We sat down with the Alabama Chamber of Commerce while we were conducting due diligence and learned the story behind that park," Slade remarks. "A lot of people in these types of parks tend to overbuild. But in this case, to build there, the developer needs a tenant and a signed lease before they'll approve it."