ValueXpress Obtains $3-Million CMBS Conduit Loan for a Shopping Center in Hiram, GA

ValueXpress obtained a $3-million first-mortgage CMBS conduit loan that was utilized to acquire a 54,450-square-foot shopping center located on Jimmy Lee Smith Parkway in Hiram, Georgia. The property is currently 94% occupied by 10 tenants and in excellent condition. The property was constructed in 2001 and consists of two one-story buildings and is anchored by Office Max.

hiram-ga-shopping-center

Hiram, GA shopping center

The asset was real estate owned and sold by Torchlight, the asset manager, through an auction process to the Sponsor. “One of the many challenges that any Sponsor faces when bidding at an auction is the limited time to undergo due diligence and underwrite the asset,” commented Dennis Suh, Vice President of ValueXpress. “These contracts can be incredibly one-sided and do not contain financing contingencies clauses.”

In this case after underwriting the loan, the Lender revealed that Office Max had an open termination right; however, the Sponsor was able to overcome this challenge by successfully negotiating a waiver with Office Max that was facilitated by ValueXpress, the management company, and the seller.

The loan transaction was structured as a 10-year term based on a 30-year amortization schedule. Loan-to-value was 75% and the property provides 1.50x net cash flow DSCR on actual income and expenses.

“We were able to get the transaction completed by properly structuring the loan to include a special Office Max Reserve to account for a potential store closure,” said Matt Hayes, a Commercial Capital Training Group graduate, and President of Commercial Capital Financial, the mortgage broker on the transaction.

 

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This entry was posted in CMBS Conduit Loans, Commercial Lending, Commercial Real Estate Loans, Michael D. Sneden, News & Recent Closings, Valuexpress and tagged , , , , , . Bookmark the permalink.

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