Dealmaker: NorthMarq Capital Arranges $55 Million for Calif. Office, Retail
Sept. 1, 2015--MBA Staff
NorthMarq Capital, Minneapolis, arranged nearly $55 million in financing for office and retail properties in California.
Jeffrey Weidell, president, and Andrew Slaton, vice president of NorthMarq Capital's San Francisco regional office arranged $37 million in financing for 3000 Sand Hill Road, a 175,8400 square-foot office building in Menlo Park, Calif.
Built by the sponsor in phases between 1971 and 1986, the multi-building office campus is on Sand Hill Road near the Interstate 280, which Weidell said is an area notable for its concentration of venture capital companies.The property is leased to more than 40 small and mid-sized firms.
"As part of the elite Sand Hill submarket, 3000 Sand Hill has historically performed extremely well," Weidell said. "Occupancy over the last decade has been in the range of 90 percent or higher and it commands rents in excess of the top of the range of asking rates for comparable properties.
The campus includes an on-site restaurant and fitness amenities.
Refinancing was arranged on behalf of an affiliate of The Ford Land Co. through NorthMarq Capital's correspondent relationship with Nationwide Life Insurance Co. The transaction has a 12-year term and 20-year amortization schedule.
Aaron Beck, vice president of NorthMarq Capital's San Diego regional office secured acquisition $6.843 million in financing for a 41,000 square-foot office building at 9715 Business Park Avenue in San Diego. The short-term loan was structured with extension options and interest only payments.
"The financing is structured to maximize the borrower's returns with its high loan-to-cost and attractive interest rate," Beck said. "The borrower incurs minimal penalty for executing their business plan ahead of schedule, but also has the flexibility to extend the timing should the execution take longer than expected."
The buyer/borrower plans to complete a rehab of the vacant building followed by a comprehensive lease-up program. The planned renovation will be designed with the corporate tenant in mind and include an updated and expanded lobby, upgraded landscaping and all new tenant improvements.
Joe Giordani, vice president of NorthMarq Capital's Los Angeles regional office, arranged $6.5 million in acquisition financing for Huntington Marina, a 45,597 square-foot office property at 4952 Warner Avenue in Huntington Beach, Calif.
The non-recourse (87 percent loan-to-purchase) loan featured a 30-day close and with a two-year interest only term. "This was a very interesting acquisition for a great piece of real estate with significant value-add potential," Giordani said. "Occupancy was running about 80 percent with a majority of the 'mom & pop' tenants on month-to-month leases. The buyers plan to clean up and extend the leases, complete external and internal renovations, as well as bring in some retail tenants on the ground floor."
Giordani said a challenge involved closing the loan in 30 days "due to a difficult seller and there was limited property information due to it being poorly managed for over a decade. However, this bridge lender understood the value-add business plan, saw the value creation potential and stretched to get the deal. They offered the highest loan proceeds and the best interest rate on a non-recourse basis."
Giordani also secured $4.5 million in refinancing for Palm Court Plaza, a 29,000 square-foot retail property at 15420-15456 Brookhurst Street in Westminster, Calif.
The transaction features a 20-year term and 25-year amortization schedule. NorthMarq arranged financing for the borrower through its correspondent relationship with a life insurance company.
"The borrower had a maturing [commercial mortgage-backed securities] loan and was tired of reserves," Giordani said. "He also like the idea of locking in a longer-term fixed rate loan. After going out to several lenders and providing a long list of loan options, the borrower decided to go with this particular life company because 1) they were willing to give the borrower cash-out; 2) they did not require any ongoing reserves; 3) they had the most competitive interest rate for 20-year fixed term 4) they had the lowest fees/closing costs."