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NORTH RICHLAND HILLS, TX-The developer of an 80,000-sf medical office building has landed $13.45 million of construction financing to replenish his till after breaking ground nearly four months ago. The office project, which is up for sale, sits at the edge of an 85-acre redevelopment site that includes a shuttered mall.
Kest Investments of Los Angeles has secured a two-year, interest-only loan from US Bank for Medical Center at Callaway Creek, rising on about six acres at the corner of North Clovis and Santa Ana avenues. The 90% loan-to-cost financing's interest rate floats at 160 basis points above Libor with no floor.
Chris Dornin, vice president of the Newport Beach, CA-based Buchanan Street Partners, says HCA, which owns the neighboring North Hills Hospital, lobbied principal Michael Kest to develop a medical office center at the edge of his North Hills Mall assembly because it needed more room. Buchanan Street Partners is Kest's adviser for the redevelopment and loan arranger.
Dornin tells GlobeSt.com that HCA initially preleased 60% or 47,500 sf of the building, but has come back for 13,000 sf more to boost its stake to 76%. The project is slated for completion in the spring, but it's already up for sale and it has yet to go vertical. Dornin says bids are due in mid-September.
Dornin says Kest opted to sell the medical center primarily so he could focus on mapping out the redevelopment plan. The schedule, right now, tentatively calls for the redevelopment, which includes razing the mall, to get under way in six months. The redevelopment will be mixed-use, but the components have yet to be determined. It will, though, include retail, Dornin says, adding several nationals have shown interest in the location.
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