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HOUSTON-Glass Wholesalers Warehouse, a local, privately owned company, has secured $10.1 million in construction and permanent financing to add 60,560 sf onto a 102,500-sf distribution center.
"The company's business is growing and they were just bursting at the seams," says Jim Adams, branch manager of GMAC Commercial Mortgage Corp.'s local office. "They came to us to help them finance an expansion of their existing facility." Teaming with Allan Dannatt and Jude Hopkins, Adams arranged the loan through GE Commercial Finance.
The new loan retires a $3.5-million mortgage with Omaha-based Woodmen of the World Life Insurance Society plus provides $6.6 million in construction financing, Adams tells GlobeSt.com. The construction loan immediately converts to a permanent mortgage when work wraps up this summer on the 4822 Southerland Rd. warehouse.
"Because the permanent loan had to have a construction piece, it was a complicated deal to finance," Adams says. The construction portion loan has an interest rate of 310 basis points over Libor. The permanent piece has a 25-year term with a 25-year amortization. The interest rate hasn't been locked in as yet, he adds, citing a 27-day turnaround on the financing package.
According to Adams, several lenders were considered to fund the deal, but GE Commercial Finance was the best fit. "A lender has to feel comfortable with an owner-occupied asset and local credit," he says, adding Woodmen had the capability to fund the loan, but it was at the high-end of the company's lending parameters. He explains GE Commercial Finance funds deals that are single-tenant, owner-occupied.
Glass Wholesalers' strong bottom line helped win the lender's nod. "The company has been around a long time," Adams says. "There's no way that a lender would make a loan this size without the borrower being financially sound."
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