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HARTFORD-Buchanan Street Partners is funding a non-recourse mezzanine loan for City Place I, a 38-story office building here. The 885,000-square-foot, class A property is using the loan for tenant improvement projects.

The owners of the property Liberty Associates acquired $39-million loan from People’s United Bank, which did not fully cover the cost of renovation on the 93%-leased building. The $10-million loan is a three-year fixed pay-rate and all-in rate with a one-year extension. The $39-million loan is also three-year with a single year extension, but holds a floating rate over LIBOR. The property needed roughly $49 million for the renovations, but the senior lender had an unofficial cap for their lending amount, explained Wayne Brandt, managing director of Buchanan Street Partners.

The building was a built-to-suit in 1983 for Aetna at $250 million. When the loan was fully amortized, he explains, the loan was zeroed out. However, a space renovation requirement was part of United Healthcare’s new lease here at 185 Asylum St.

Buchanan gave Liberty the opportunity to prepay the loan and/or pay off the loan before the end of the three- or four-year term. There is a possibility that the Liberty is positioning the property for disposition in three to four years, Brandt tells GlobeSt.com, so this arrangement was an appealing one. Buchanan is a subsidiary of the Newport Beach, CA-based TCW Group, Inc.

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