Beer Wells retired debt from the New York City-based Column Financial Inc. with fresh money from First American Bank, the Bryan-institution now under a takeover agreement by Citigroup. The new loan came with an adjustable rate--1.5% above Libor versus the near 4% that was attached to the retired vehicle, Steve Heldenfels, a director in Dallas for Holliday Fenoglio Fower LP, tells GlobeSt.com. He says Beer Wells "split" a building from the five-property package and applied the gain to "significantly" lower the debt level.

Heldenfels says the borrower's LTV was "so strong" that several lenders wanted a piece of the action. First American's Dallas office bundled the right words--flexibility and structure--to win the deal. "The bottom line is the borrower has all he needs to maximize the value of this portfolio," says Heldenfels, who set up the original loan for the acquisition. Under the new terms, a building could be sold tomorrow, the gain applied to the note and no prepayment penalty imposed. It also opens the door to another refinance in the event the 62%-leased package makes a strong occupancy gain.

The 1980s-era portfolio contains more than 100 tenants, with leases mostly in three- to five-year terms, according to Heldenfels. The ace in the hole right now is a below-market rent of $14 per sf to $18 per sf for class B and B-plus office space in a recovering office market and a submarket in line to regain popularity when freeway construction wraps up, he says. "Improved area market occupancy in addition to below market rents give the portfolio a tremendous amount of upside potential," he says in a press release.