TOWSON, MD-Earlier this month, St. John Properties sold the 206,000-square-foot Maryland Executive Park for $26.5 million. The buyer was a fund based in Connecticut, Greenfield Partners LLC. Now more details about that transaction have emerged—namely that EagleBank provided the financing for the acquisition, a $19.8 million floating rate loan that will serve as interim financing for the next few years. The three-year term comes with two one-year extension options.
Gideon Gil, Alexander Hernandez, and Sridhar Vankayala of Cushman & Wakefield's Equity, Debt and Structured Finance team represented the sponsor in the financing.
Floating rate loans are becoming more prevalent as lenders push these products more as interest rates become less predictable. In this case, EagleBank offered the sponsor a choice of both fixed and flexible financing. Gil explains why it opted for the latter.
"This is a property that has significant value add in the short term," he tells GlobeSt.com. "Once lease up happens, we'll look at all options on the table to refinance--CMBS or a life loan—or possibly a sale.
The company had other options besides the choice between floating rate and fixed, Gil adds. "It had also considered debt bonds for financing, as they have become more aggressive. "But ultimately the sponsor wanted financing from a relationship bank."
Maryland Executive Park consists of seven office buildings located at 8501 and 8600 LaSalle Road. Tenants are in the medical, law, marketing and general services sectors.
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