Breakwater Equity Partners Announces US Cellular Lease Renewal

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122,826 SF Deal Inked for Tulsa Office Building

Union Pines

“We thought that refinancing would be easy because we had equity, but it wasn’t," said Corky Bless, one of the investors.

Breakwater Equity Partners, a commercial real estate advisory and investment firm, has secured a five year lease renewal from U.S. Cellular. The tenant will continue to occupy 122,826 SF at Union Pines, a 134, 298 SF office building in Tulsa, OK. US Cellular has been the primary tenant in the building since 1999, when it was built, and will remain in the two-story building. This lease marks an important milestone in the restructuring of Union Pines, and will allow the owners to secure new financing. With this lease renewal the building will maintain occupancy of 96%.

“The lease negotiations were complex because we had to balance the tenant’s desire to maintain maximum flexibility on the lease term, while satisfying the requirements of the new lender,” said Jack Rose, Breakwater Chief Strategist. “After a comprehensive analysis of the market and extensive financial modeling of the investment, we were able to negotiate a favorable lease for the owners. This lease, combined with the new financing, will enable the owners to increase their distributions.”

“We thought that refinancing would be easy because we had equity, but it wasn’t,” said Corky Bless, one of the investors. “Without the tenant renewal in place, we could not get a loan extension or new financing. We are delighted that US Cellular will be staying in Tulsa.”

The 22 tenant-in-common owners of Union Pines engaged Breakwater late last year when it became apparent that the property was facing difficulties. The lease for the primary tenant, US Cellular, was due to expire later this year. The loan on the property was maturing at about the same time, and the lender was unwilling to extend the loan due to the uncertain revenue stream. In addition, the property was experiencing some drainage issues. The owners hired Breakwater to remediate the building, renew the primary lease, provide loan guarantees for the new financing, and maximize the distributions for the owners.

“Union Pines could have been foreclosed if the owners had not been proactive,” said Rose. “Lease renewals are a crucial part of a loan restructure, especially in cases like Union Pines where the stability of the cash flow is dependent on a key tenant. With the lease renewal in hand, we expect to close on our new loan within 10 days.”

About Breakwater Equity Partners

Breakwater Equity Partners is a San Diego-based commercial real estate advisory, restructuring, and investment firm. Through our extensive experience on over 200 engagements with loan values in excess of $3B, the firm has devised a unique, multidisciplinary approach to analyzing and optimizing distressed assets. Breakwater’s professional team combines legal, financial, economic, lender, tax, and regulatory expertise to devise customized strategies for each property regardless of market (primary to tertiary), asset class (office, retail, multi-family, industrial, flex, land), loan type (portfolio or CMBS), or circumstance (performing or non-performing).

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Melanie Tucker
since: 06/2010
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Breakwater Equity Partners
since: 09/2013
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