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HOUSTON-A Canadian investor has bought two CVS/Pharmacy stores in the Greater Houston area and refinanced three others in a five-loan arrangement with Artesia Mortgage Capital from Belgium. The notes, with 75% loan-to-value ratios, total $11.65 million.

The package wasn’t an easy feat to accomplish because the longest term on the lease is “less than 15 years,” Stuart Wernick, founder and president of Dallas-based Quantum First Capital, tells GlobeSt.com. “We had to convince the lender that CVS was committed to maintain and operate these stores even though it didn’t have the CVS corporate name on the lease.” And, he adds, the investor was adamant about securing five loans with one lender at the same terms for the former Eckerd Drug Stores in Sealy, Lufkin and Channelview, TX and two near Shreveport, LA.

Wernick says Artesia was interested in financing the deals because only two drug stores in the package have any competition in their respective markets. On the down side, only two stores have leases with 13-year terms so the borrower needed to act now, he explains. “They are significantly into the mature state of the operations,” he says.

Quantum’s Eli Gershenson arranged the financing. He says each loan has a 10-year term, 30-year amortization and mid-5% fixed-rate interest–with assumable terms.

Wernick says the investor was able to retire loans with higher interest rates as a result of the Artesia financing. The acquisition component ticketed $1.3 million for the 8,640-sf drug store in Sealy and $2.38 million for the 10,900-sf shop in Lufkin. The balance of the portfolio is made up of 10,908-sf stores.

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