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| Mitch Paskover |
The bridge loan is
sized to 70% of the total cost, including an interest reserve, funds for tenant
improvements, and leasing commissions.
The financing was
arranged by Mitch Paskover, President at Continental Partners and
Delaney Crawford, Associate at Continental Partners.
The five-story,
10,384 square-foot property was purchased by M31 Capital, a private equity real
estate firm. The Sponsor plans to strategically renovate each floor upon
vacancy and re-tenant a majority of the floors with companies that have
preleased the space, according to Paskover.
“Continental Partners completed an
extensive market survey to determine comparable rents and justify the projected
value of the asset at stabilization,” explains Paskover.
“By cultivating a deep understanding of the
Sponsor’s business plans and communicating our findings accordingly, we were
able to identify a lender that provided a bridge loan surpassing the initial
amount requested, allowing the Sponsor to meet the goals of this investment
while preserving more equity for additional projects.”
The asset consists of retail and
office space on the ground floor, along with four additional floors of office
space and a storage basement. With current leases as much as 90% below market,
the Sponsor will create significant value through improvements as these end,
Crawford notes.
“We needed to source a lender
who understood the long-term investment potential of renovated office space in
the Financial District submarket, given the region’s booming technology
industry, business activity, and employment growth,” says Crawford, who notes
that the Bay Area’s unemployment rate registered at just2.2% as of September.
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| Delaney Crawford |
Paskover adds: “By positioning the
financing request correctly and demonstrating these strong fundamentals, our
team was able to far exceed the Sponsor’s requirements, structure an interest
reserve, and open the door for future opportunities.”
The loan is priced at 30-day LIBOR + 350
with no prepayment penalty and has a total consideration of $6.55
million. The subject property is located at 620 Commercial Street
in San Francisco, California.
Contacts:
Micaela Fehrenbach / Elisabeth Manville
(949) 438-6262
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