The 10-year $30 million loan, from an unnamed commercial mortgage-backed securities lender secured on behalf of real estate investment firm Optimus Properties, was structured with a loan-to-value of 65 percent with a five-year interest-only period, followed by an amortisation of 30 years.
The rate was fixed at the 10-year swap plus 2.53 percent, with a 1.23 debt coverage ratio and 7.75 percent debt yield.
“With the wave of CMBS loans set to mature this year, many borrowers are looking to refinance,” according to George Smith Partners principal and managing director Shahin Yazdi. “It’s prudent to seek long-term fixed-rate loans in order to lock in low rates now, prior to future interest rate increases,”
“The challenge with this deal, however, was that despite the strength of the center’s tenant mix, many of the anchor tenants had leases that were set to expire in the next several years. As a result, many lenders were hesitant to be aggressive with the debt yield.”
“By demonstrating the strength of this stabilised asset, which has historically maintained nearly 100 percent occupancy and a strong roster of national credit tenants, we were able to secure competitive cash-out refinancing,” Yazdi said.