560,635-SF Office Portfolio Gets $20M of New Capital

DALLAS-The local owner of a 560,635-sf, class B office portfolio has closed a $20-million refi to replace acquisition financing from three years ago and lock in today’s financial buzzwords–flexibility and structure–to the four-year term. The loan, with a 70% loan-to-value ratio, went full circle in three weeks.

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.