Tuesday, July 23, 2019

MetroGroup Realty Finance Provides Acquisition Financing for Four Triple-Net Lease Properties in Illinois and Texas


J.D. Blashaw
NEWPORT BEACH, CA  MetroGroup Realty Finance, a private commercial mortgage banking firm based in Newport Beach, California, recently provided a total of $11.75 million in financing to private investors for three separate 1031-exchange transactions involving the acquisition of four single-tenant triple-net lease assets in Illinois and Texas.

 The transactions represent a rising trend of local investors looking outside of California for this asset class, according to J.D. Blashaw, Vice President of MetroGroup Realty Finance.

“Cap rates have compressed and, consequently, yields have declined significantly in California, so we are increasingly seeing local credit tenant net lease investors seeking higher cap rates and yields on their investments,” says Blashaw.

“This search has taken them away from their backyards into other states and sometimes secondary markets, and the passive nature of triple-net leases matches well with these investors desire to own properties with little or no management obligations.”


Ivan Kustic

The credit tenant net lease market has perennially been attractive to 1031 exchange buyers seeking safe, long-term and passive investments for their capital, Blashaw says.

The firm arranged financing for the following properties:

5001 N. Big Hollow Road, Peoria, Illinois

            MetroGroup Realty Finance provided $5.8 million in permanent financing to a private investor for the acquisition of a 46,432 square-foot stand-alone retail building at 5001 N. Big Hollow Road in Peoria, Illinois, as part of a 1031 exchange transaction. The property is fully occupied by a Best Buy retail store.

The 6.25-year fixed rate recourse loan at 75% loan-to-value features a 25-year amortization and a flexible prepayment provision that expires after three years.

The financing was arranged by J.D. Blashaw and Ivan Kustic, also Vice President at MetroGroup Realty Finance.

Best Buy retail store, 5001 North Big Hollow Road, Peoria, IL
4160 S. Archer Avenue, Chicago, Illinois, and 601 N. Harlem Avenue, Oak Park, Illinois

MetroGroup Realty Finance provided $3.4 million in permanent financing to a long-time private investor client for the purchase of two TCF Bank branches in the Chicago market: $1.825 million for a 2,542 square-foot property at 4160 S. Archer Avenue in Chicago, Illinois, and $1.575 million for a 2,700 square-foot property at 601 N. Harlem Avenue in Oak Park, Illinois.

Part of a 1031 exchange transaction, the properties, which are 100 percent occupied by TCF Bank, were sold by Chicago-based Clark Street Real Estate.

The loans were a combined 47% loan-to-value and feature a 10-year fixed rate and 30-year amortization. The financing was arranged by J.D. Blashaw and Ivan Kustic at MetroGroup Realty Finance.



1006 E. Interstate 2, McAllen, Texas

            MetroGroup Realty Finance also provided $2.55 million in permanent financing to a private investor for the purchase of a 10,050 square-foot medical office building at 1006 E. Interstate 2 in McAllen, Texas as part of a 1031 exchange transaction.

The property was developed in 2017 by the seller, DaVita Inc., the real estate division of the tenant, and is fully occupied by DaVita Dialysis in the sale/leaseback arrangement.


The 10-year fixed rate loan at 70% loan-to-value features a 25-year amortization and limited recourse. The loan was arranged by J.D. Blashaw and Ivan Kustic of MetroGroup Realty Finance.


CONTACTS:

Alex Caswell/Lexi Astfalk
Brower Group
(949) 438-6262



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