Johnson Capital Partners of Arizona LLC arranged the financing with an interest rate of about 6% and a 30-year amortization through Carmel, IN-based 40/86 Mortgage Capital. According to Keaton Merrell, a loan officer with Johnson Capital Partners, the financing allows Diamond Ventures to redevelop a portion of the 6236 E. Broadway Rd. property within the first three years and pay off that piece of collateral without a fee.

Merrell says Diamond Ventures is faced with the possibility that tenant, HealthSouth, might vacate a 9,000-sf building. If that occurs, Diamond Ventures has the option to raze the structure, assigned a $1.3-million value by the lender, and rebuild on the land. According to Merrell, the developer's replacement product could be office or retail. He stresses the loan does not include redevelopment funds.

"The loan was highly structured," Merrell tells GlobeSt.com. "Most lenders wouldn't allow that kind of structuring. In fact, there was only one group we could go to that we knew would work with that kind of structure." He adds the biggest challenge is that most lenders want to securitize the loan and a CMBS loan does not allow for any modifications to a securitized asset.