Joe Giordani, vice president of NorthMarq Capital’s Los Angeles-based regional office, arranged a non-recourse bridge loan totaling $6.13 million for a 109,000 sq. ft. industrial flex property located in Phoenix, Arizona. The transaction was structured with a 3-year interest-only term. The floating rate, interest-only transaction featured a 75 percent loan to cost and allowed for partial releases of collateral during the loan term. An interest rate cap was not required.
This was a highly negotiated bridge loan transaction,” said Giordani. “The property was 67 percent leased when they opened escrow. The plan is to clean-up the overall look of the property and convert much of the overbuilt office space into more traditional flex space. The 3+1+1 year term with 18 months of spread maintenance provided the flexibility the borrower needed to execute their business plan along with the safety of having an additional two years of term if the lease-up doesn’t happen as quickly as anticipated.”
The loan documents were highly structured to provide pre-approved partial release provisions should the borrower decide to sell off individual buildings at a price per square foot that makes sense for the overall project and achieve or exceed the returns for their investors. NorthMarq created a highly competitive environment when bidding out this financing opportunity to lenders that provided the borrower the most aggressive terms possible. Additionally, NorthMarq was highly involved throughout the loan process to ensure a smooth closing.