Burlingame, CA (PRWEB) February 03, 2014
Executive Vice President Scott Monasch recently closed a $9,200,000 loan on a single tenant Safeway in an upscale tertiary market in Arizona’s Phoenix area. The loan was a 30/7 amortization/term, with 5 years of interest only. The challenge was a 9 month escrow period, as the seller wanted to be able to realize a 1 year ownership period prior to sale in order to avoid 1031 tax implications. This created interest rate volatility for the borrower, with Treasuries rising approximately 80 Bps during the 9 month period.
Additionally, the due diligence discovered a significant drop in market rents for the property and surrounding area in relation to the long term lease rate in place. Despite increased spreads, we were able to have the lender hold the original spread as well as the Interest only component by dropping the proceeds by 5%. The deficit in market rates was handled through a springing cash sweep, contingent upon the tenant’s credit rating dropping below a specified threshold, which will be removed if the rating increased.
About Barry Slatt Mortgage: Barry Slatt Mortgage is a long-standing and respected institution with more than four decades of experience in commercial mortgage banking. Slatt has correspondent relationships with several of the most prestigious lenders in the country, providing custom-tailored solutions for borrowers' needs.