NEW BRAUNFELS, TX – Marcus & Millichap Capital Corporation (MMCC) has arranged $10,320,000 in refinancing with cash out for a 164-unit multifamily property in New Braunfels.Jake Roberts (lower left photo) and Anita Paryani (top right photo) vice presidents capital markets in MMCC’s West Los Angeles office, arranged the financing.
“The borrower had assumed a loan that was due in October 2012,” says Roberts. “MMCC was asked if it made sense to refinance now or wait until the prepay was complete.
" We put together an analysis that showed that over seven years, assuming rates go up 20 basis points between now and October 2012, there would be tremendous savings to be realized, even with initial prepay costs, by refinancing now,” continues Roberts.
“The borrower decided to proceed and wanted to cash out up to nearly 90 percent of the original purchase price with as much interest-only as possible,” adds Paryani. “We originally provided a loan for $9.8 million in proceeds, and then MMCC was able to push the underwriting to get a final loan amount that was $500,000 greater than the amount in the original application.”
“Often it makes more sense to refinance up to a year early if the borrower believes rates will increase 20 bps to 50 bps or more before their loan is due,” concludes Roberts, “and we are currently analyzing a number of refinance scenarios for clients that will allow them to lock in their rates now and then just take their cards off the table.”
The fixed-rate loan is for seven years, amortized over 30 years. The loan to value is 75 percent.
$16.5 Million Arranged in Northern California by Marcus & Millichap Capital Corp.
LOS ANGELES, CA – Marcus & Millichap Capital Corporation (MMCC) has arranged a $16.5 million nonrecourse loan with cash out to refinance a 64,144-square foot medical office building located in Northern California.
Jake Roberts and Anita Paryani, vice presidents capital markets in MMCC’s West Los Angeles office, arranged the financing.
“Medical office is strong right now, but this property was located in a secondary market and more than 80 percent of it was occupied by an unrated, not-for-profit hospital,” says Roberts. “These factors made this origination essentially a single-tenant loan from the perspective of many lenders and made it much more difficult to structure the required loan.”
“A cash-out loan on a building with significant exposure to an unrated tenant is challenging,” adds Paryani. “We worked with one lender that could not get comfortable with the transaction, even after many months of underwriting. As soon as we realized that the original lender wasn’t going to work out, MMCC was able to source another lender that held the same spread and cash-out even though the market was quite volatile,” Paryani continues.
“We used all of our original third-party reports and most of our already completed due diligence documents to close the loan quickly and exactly as stipulated in the original application,” concludes Roberts.
The loan is fixed at 6.01 percent for 10 years and amortized over 30 years. The LTV is 68 percent.
Contact: Stacey Corso, Public Relations Manager, (925) 953-1716
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