Beer Wells retired debt from the New York City-based ColumnFinancial Inc. with fresh money from First American Bank, theBryan-institution now under a takeover agreement by Citigroup. Thenew loan came with an adjustable rate--1.5% above Libor versus thenear 4% that was attached to the retired vehicle, Steve Heldenfels,a director in Dallas for Holliday Fenoglio Fower LP, tellsGlobeSt.com. He says Beer Wells "split" a building from thefive-property package and applied the gain to "significantly" lowerthe debt level.

Heldenfels says the borrower's LTV was "so strong" that severallenders wanted a piece of the action. First American's Dallasoffice bundled the right words--flexibility and structure--to winthe deal. "The bottom line is the borrower has all he needs tomaximize the value of this portfolio," says Heldenfels, who set upthe original loan for the acquisition. Under the new terms, abuilding could be sold tomorrow, the gain applied to the note andno prepayment penalty imposed. It also opens the door to anotherrefinance in the event the 62%-leased package makes a strongoccupancy gain.

The 1980s-era portfolio contains more than 100 tenants, withleases mostly in three- to five-year terms, according toHeldenfels. The ace in the hole right now is a below-market rent of$14 per sf to $18 per sf for class B and B-plus office space in arecovering office market and a submarket in line to regainpopularity when freeway construction wraps up, he says. "Improvedarea market occupancy in addition to below market rents give theportfolio a tremendous amount of upside potential," he says in apress release.