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DUBLIN, CA-Charter Properties of Pleasanton has closed on a $65-million, 100% acquisition and development loan for Grafton Station, a 178,590-sf retail center on 14 acres within the 1,500-acre Dublin Ranch master planned community, according to Johnson Capital, the firm that brokered the loan. Ghost-anchored by a Lowe’s home improvement center, the center is expected to open in 2008 with two or three big box retailers and 60,000 sf of smaller shop space.

The recourse loan has a two-year initial term and a one-year extension option. The interest rate is less than 150 basis over LIBOR. One of the brokers in the deal, Mark Wolf of Johnson Capital’s Irvine Office tells GlobeSt.com that the interest rate is well below current market rates, which are currently 175 points to 225 points over LIBOR.

“We caught the market right, just before things started to get shaky,” Wolf says. “The quality of the borrower also had a lot to do with it.”

In addition to the 100% financing, another interesting part of the deal is how Charter dealt with the land prior to the financing. Charter Properties sold the entire property to Lowe’s in a deal that included a re-purchase option that the aforementioned acquisition and development loan allowed Charter to exercise. “(Charter) is a savvy developer that wasn’t quite sure what it was going to do with the rest of the land,” Wolf says. “So it got (Lowe’s) to carry the land on their balance sheet until he figured out his approach.”

Wolf was assisted in brokering the loan by fellow Johnson Capital brokers Greg Richardson, Spencer Rinker and Daniel Bovee. Wolf and company retain the exclusive right to source the permanent loan that will take out the construction loan.

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