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SAN FRANCISCO-Pacific Eagle Holdings Corp., the San Ramon, CA-based subsidiary of Hong Kong-based Great Eagle Holding Ltd. has refinanced 500 Ygnacio with a $17-million loan from Jackson National Life of Lansing, Michigan, PPM Finance’s U.S. subsidiary.

Cohen Financial, which arranged the loan, says the 70% financing includes an additional $2-million earn-out upon stabilization of the property, which is approximately 77% leased. The interest rate on the loan is 225 basis points over the 30-day Libor. The first two years of the loan are interest-only. The proceeds paid off the previous debt on the property and then some.

“We funded it about 90 days ago; today the spread would be 350 points and you wouldn’t get that kind of leverage,” Cohen Financial’s Paul Schroeder tells GlobeSt.com. “This is a real deal with cash out, an increased loan amount, an earn out; it’s not something for every transaction but in today’s world, with BART nearby, wonderful parking and good management, we’re going to do it.”

The greatest obstacle was the 22% vacancy, due to a large law firm that recently relocated. But ultimately it wasn’t that tough to overcome, Schroeder says.

“The property has the suburban building characteristics that [the lender] believes in the long run will help it outperform the market,” he says. “It’s an A borrower, an A location, and there’s cash in the deal; [the lender] is not going out on the limb very far.”

Cohen Financial’s Loan Administration platform is servicing the loan. The firm recently gained a select servicer ranking from Standard & Poor’s Rating Agency.

Pacific Eagle Holdings Corp. acquires prime office buildings and hotels nationwide for its own account. 500 Ygancio is the only Silicon Valley property listed on its Web site. In San Francisco proper, it owns 150 Spear St. and 353 Sacramento. In Los Angeles, it owns 888 W. Sixth St. It also owns 250 Franklin in Boston.

Its parent company, Great Eagle Holdings, is a publicly traded global real estate holding company with real estate assets in excess of $4 billion. Among Great Eagle Holdings’ assets is the Twin Tower Citicorp Plaza in Hong Kong, the landmark Langham Hilton Hotel in London, the Sheraton Tower Southgate in Melbourne, Australia, The Renaissance Hotel in Toronto, Canada. In addition, it is developing a two-million-sf mixed-use commercial complex in the heart of Mongkok, the busiest retail district in Hong Kong.

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