Johnson Capital Partners of Arizona LLC assisted the company in securing a $9.4-million, fixed-rate construction and permanent loan for the project. The lender, Carmel, IN-based Mortgage Capital, provided a 5.45% construction loan that is interest only for the first year.

Once Royal Paper moves in, the loan automatically converts to a 15-year permanent mortgage at the same fixed rate and amortizes on an 18-year schedule, according to Lucas Donahue of Johnson Capital Partners. "The financing has allowed the borrower to secure construction and permanent financing from one source, with one closing, one set of third-party reports and one set of fees," Donahue explains. The construction and permanent financing option also allowed Royal Paper, now operating at 711 N. 17th Ave., to lock in an interest rate for the life of the loan to eliminate an interest rate risk during construction.

Donahue tells GlobeSt.com that it was challenging to obtain financing for the 318,000-sf facility, which will go up at the northwest corner of 51st Avenue and Lowe Buckeye Road. He says only a few lenders were interested in the project because it was a single tenant, non-credit transaction.