Office Owners Landing New Financing

As HFF managing director Bill Rose explained in describing the deal, the loan was an illustration that "There is competitive financing available for top-tier sponsors and best-in-class real estate." In this case the sponsor, or borrower, was American Assets Inc., a 40-year-old real estate development and investment firm, and the buildings are fully leased. Rose teamed with HFF senior managing director Tim Wright, and associate directors Zack Holderman and Rob Hinckley, to place the loan with John Hancock Real Estate Finance on behalf of American Assets.

Among other office financings lately was a construction loan for development of Centene Corp.'s $186 million headquarters set to be built in Clayton, MO. As GlobeSt.com reported in February, city officials approved a revised plan for the project, which shrunk the building's size by four floors and reduced the price from $215 million to the current $186 million.

Locally-based Clayco has teamed with Chicago-based U.S. Equities and St. Louis-based Koman Group to develop the project. The 20-story mixed-use development at the corner of Forsyth Boulevard and Hanley Road will expand the current Centene HQ and add retail and office space, as well as a parking garage to the site.

In another Southern California transaction, Century City-based George Smith Partners reports that it closed on a $22 million loan, at 75% loan-to-cost financing, to fund the $26.6 million purchase of a 200,000-square-foot office complex in El Segundo on behalf of a privately held company. GSP describes the challenge in placing the loan: "The borrower was under a very tight time constraint to close because this was an acquisition, they had a large non-refundable deposit at risk and had negotiated a substantial discount to close quickly," GSP says in the June 3 edition of its newsletter, FINfacts.

GSP worked early on with the lender and had the borrower's credit fully approved so the lender were ready to proceed when the building was located. When the property was selected, the lender proceeded to approve and close within two weeks.

In another financing, this one in Newark, NJ, a 104,000-square-foot office building is now backed by a permanent financing package in the amount of $13 million. Morristown-based commercial mortgage banking firm Q10/G.S. Wilcox & Co. helped the owner obtain the funding from a regional bank that G.S. Wilcox originates and services loans for. The borrower acquired the property in 2007 and sought a permanent loan to replace a short-term funding vehicle used to reposition the asset. The new five-year loan closed at a 75% LTV ratio and an interest rate of 6.25% with a 25-year amortization.