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HOUSTON-An investment company from Los Angeles has obtained a $7-million bridge loan to help with renovations and leasing of the 128,405-sf Ashford on the Bayou, a five-story office building in Westchase.
RPD Catalyst LLC initially purchased the property at 1001 Dairy Ashford Rd. from a limited partnership led by Prudential Real Estate Investors of Parsippany, NJ. The new owner will use the funds for capital improvements to help boost the current occupancy rate of 44%.
"We had several lenders for this property because it made sense," says David Aaronson, a principal with Houston-based Live Oak Ltd., which helped to secure the loan for RPD through the Boston-based NewStar Financial Inc. "The equity that the buyers put in was reasonable. The lenders' risk for what they were being asked to take was reasonable and we have an experienced sponsorship that has a good game plan to get the project updated and leased."
Aaronson tells GlobeSt.com that renovations on the structure should be complete within 120 days. Part of the changes have included the addition of Michael Martin with local firm, PM Realty Group, to manage and lease the class B space. The PREI partnership bought the 20-year-old building, sitting on 2.5 acres, in 1999. Danny Miller in CB Richard Ellis Inc.'s Houston office brokered the sale.
The lead tenant is Allied Waste, which just signed a lease for 25,000 sf. Aaronson adds that because much of the building contains smaller tenants, "there shouldn't be a significant roll over the next couple of years."
Aaronson says the holdback on the deal is a strong one. "There's plenty of money in the loan to fund renovation and tenant improvement as well as leasing commissions," he says.
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