OC Portfolio Building
NEWPORT BEACH, CA-An Orange County-based private investor has refinanced a portfolio of three properties in three different cities in the county for $7.4 million and taken cash out of the deal. Carl W. Fuller of the Alison Co., who arranged the financing, reports that the properties that were refinanced included a class B multi tenant office building in the airport area totaling 32,000 square feet, an older multi-tenant mixed-use building called El Camino Office Retail totaling 20,000 square feet and a ground lease at Newport Center Fashion Island. The three buildings had stabilized occupancy levels above 90%.
The new financing, which is for 25 years at an interest rate in the 5.75% range and and amortizes over the 25 years, paid off existing debt and provided additional liquidity to the borrower. The lender was an Alison Co. correspondent life insurance company.
Lynwood Property
In another deal, arranged by the Alison Co.'s Shaun Moothart, a private investor based in Southern California refinanced a grocery-anchored retail center off of Atlantic Avenue in Los Angeles. Built in 1996, the center consists of 59,000 square feet within a big-box building with in-line shop space and a McDonald's pad building.
The $5.5 million loan, which is non-recourse through an Alison Co. correspondent life insurance company, is for 10 years and amortizes over 25 years. It paid off the borrower's maturing debt and covered closing costs. Moothart notes that the Alison Co. locked the loan in at a low rate at application, "just before rates shot up 20 to 30 basis points."
Says Moothart: "This ability to lock the interest rate for up to 75 days can be a major advantage in a very volatile market in comparison to many banks and other lenders who do not offer the ability to lock the rate until the loan has been approved, often taking 30 to 45 days before the borrower knows for certain what the interest rate is going to be for the term of the loan. Consequently, debt service payments and ultimately cash flow figures are virtually unknown until much later on in the process."
Valencia Building
Moothart comments further on the deal: "With in-place lease expirations and rollover a primary concern to the lender, the Alison Co. was able to work alongside both borrower and lender to successfully agree upon a structure that satisfied both sides of the transaction."
In a refinancing of an office building on Avenue Stanford in the master-planned Valencia business complex, the Alison Co.'s Jim Deal arranged a $6.05 million loan for a Denver-based private investor. The property is a former single-tenant, two-story flex office building measuring 75,430 square feet that has been retrofitted and now leased as a multi-tenant building with executive suites. It is 85% leased and occupied by over 25 local tenants and businesses. The new life insurance company financing, which retired a maturing bank loan, is for 21 years at a fixed rate that resets every seven years and amortizes over 25 years.
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