Done Deals: Tauro Capital Advisors Secures $50 Million in Loan Facilities for Three National Triple-Net-Lease Developers

Sunday, August 23, 2020

Tauro Capital Advisors Secures $50 Million in Loan Facilities for Three National Triple-Net-Lease Developers

LOS ANGELES, CA — Tauro Capital Advisors, Inc., a fully integrated financial services company with a diverse background in all aspects of commercial real estate, has secured a total of $50 million in revolving debt facilities that will enable Single-Tenant-Triple-Net-Leased developers to expand their portfolios through new site acquisitions and development.

Stephen Stein, Managing Partner and Tony Festa, Director, Capital Advisor at Tauro Capital Advisors, Inc. worked together to arrange the financings.

Stephen Stein

According to Festa, there has been an increase in demand for NNN properties regardless of the current environment thus fueling the accelerated pace of NNN development.

“Single-tenant triple-net-leased product has continued to emerge as a stable asset class of choice for many investors across the country,” explains Festa.

“The industry saw a similar trend out of the 2008 downturn and throughout the last cycle, when single-tenant net-leased properties continued to perform and emerged from the recession relatively unscathed and resistant to market conditions. "

Today, we are seeing a similar shift as an increasing number of investors turn to NNN product rather than more management-intensive alternatives.”

Tony Festa

As the leader and most active intermediary of financing in the NNN sector nationally, the three most recent facilities arranged by Tauro Capital Advisors, Inc. include:

$25 Million Facility arranged on behalf of a local developer in Santa Monica, CA, who plans to develop additional NNN properties including national credit tenants 7-Eleven, Starbucks, Dutch Bros. Coffee and Chick-Fil-A.

$15 Million Facility arranged on behalf of a western developer who will use the facility for NNN developments for Circle K, O’Reilly’s, AutoZone, Starbucks amongst other national credit tenants.
$10 Million Facility arranged on behalf of a private developer in Northern California to fund future development for a variety of major tenants throughout California including Starbucks, Grocery Outlet, 7-Eleven.
All three facilities were secured through private lenders and debt funds offering 100% Loan-to-Cost debt facilities.
This provides increased liquidity for developers by freeing up otherwise tied up equity allowing them to pursue more opportunities without sharing any profit participation.

The use of funds includes reimbursement of all pursuit costs, leasing commissions, and due diligence, as well as land acquisition, financing and construction costs, and a development fee if desired.
Tauro’s lending sources can provide single facilities of up to $100 million. Tauro has arranged other facilities for developers of Chase Bank, ALDI, Dunkin Donuts, Smart & Final and other national credit tenants.
“While lenders are being understandably cautious, the ability to secure large facilities like these in the current market climate speaks to Tauro’s strength as a financial intermediary and its deep knowledge of this product type,” says Festa.
“While most construction financing has dried up, our firm continues to source funding that aligns with our clients’ needs. This is largely because we are actively nurturing our capital relationships, so we always know where and how to access capital on behalf of our clients.”

Tauro’s operational platform includes weekly lender presentations that keeps the entire firm up to date on a vast network of lenders’ specific qualifiers and areas of focus.

“By knowing what each lender is seeking, we are better able to secure terms that benefit both lenders and borrowers,” says Festa.
“In this case, the $50 million in facilities will enable these three developers to acquire parcels with certainty, ramp up development, make faster decisions, and reduce long-term costs while moving their business plans forward.”