PHOENIX-With a loan maturity looming, Younan Properties has refinanced 4041 Younan Plaza, a 20-story, 405,693-square-foot office building located in downtown. The Woodland Hills, CA-based owner obtained the five-year, fixed-rate loan through a new conduit program with Deutsche Bank and used the proceeds to buy out the class A office tower’s largest investor.
“We had a balance sheet loan with a high interest rate that was coming due,” says Zaya S. Younan, chairman and chief executive officer. His firm hired Richard Scandaliato of RKM Capital to find a capital source for the deal.
“We were surprised by the availability and the terms of the CMBS loan,” Younan admits, adding that the new conduit loan provided 70% LTV and an interest rate near 5%. “We did not know CMBS was active because these days you’re not sure of anything. We learned that CMBS is coming back to life, and that a lot of banks are originating and able to package them.”
Younan says Deutsche Bank’s new program is “very attractive.” The bank was able to complete its due diligence and underwriting quickly and fund the loan in 30 days, he notes.
Younan declined to disclose the amount of the refi; however, he tells GlobeSt. that the refi proceeds allowed Younan Properties to increase its ownership in the building from 20% to 100%. “A Chinese investor with no other holdings in the U.S. owned 80% of the building,” he says. “We believe in the asset, and we believe in the recovery of the Phoenix, so we bought him out.”
At the time of the refi, 4041 Younan Plaza was 85% occupied. “Because the property was stabilized, Deutsche Bank used in place NOI to underwrite the loan,” Younan says, adding that his firm is working with the lender to refinance other properties and take advantage of favorable loan terms.
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