Bruce Krall, a managing director of Cohen Financial's Newport Beach Office who represented the borrower, explains that Quest sought to replace its equity in the property with new debt, "which is viewed as a cash-out refinance in today's conservative capital markets," Krall says. Krall points out that, "The creditworthiness of the borrower helped the lenders get comfortable with the cash-out refinance and the $201 loan per square foot."
According to the latest quarterly financial report filed by Quest, the company secured the loan from Mutual of Omaha Bank. To fully fund the transaction, Cohen Financial brought in a second lender as a participant in the transaction. The participating lender is a relatively new Southern California bank. Quest's filing says that the refinancing is a fixed-rate, 7.03% loan that matures in five years and is on a 25-year amortization schedule. The loan-to-value ratio was 70%, according to Cohen.
Krall comments that Cohen was "very pleased to be able to deliver such favorable terms in an environment where very few lenders are actually lending." He adds, "The bank was impressed with our client's financial strength, and the prospect of a long-term relationship with such a well-run and successful company."
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