MADISON, WI—Commercial real estate investment banking firm George Smith Partners has just arranged $18.9 million in financing on behalf of its client, Pheasant West LLC, for the refinance of its 200,000 square-foot office building at 7974 UW Health Court in the city of Middleton, WI, a suburb of Madison. GSP's Vice President Steve Stein says lenders found the property appealing because it is 100% leased to the University of Wisconsin Medical Foundation offices.
"This was a highly attractive refinance loan opportunity for lenders, based on the property's tenant, which is long-term, stable and has strong financial backing through its affiliation with the University of Wisconsin. A long-standing single-tenant provides steady income for a property owner through the life of a loan. As a result, lenders feel more secure with regard to loan repayment.”
The property, a four-story office building that sits on 10 acres, features 160,000-square-feet of office space and 40,000-square-feet of storage space. It was built in 2007 and the medical foundation has leased it ever since.
However, although most lenders would have a great deal of confidence in such a tenant, finding lenders comfortable with the property's ownership structure was a bit more difficult. Instead of a single owner, the borrower, Pheasant West LLC, is a 74-member LLP.
“With this ownership structure, no single owner in the LLP holds a substantial interest in the ownership entity,” explains Stein. “This structure can be a concern for potential lenders. To remedy this, we drew upon our extensive network of financiers to identify a lender who was familiar with this ownership structure, and had lent to companies with this structure in the past.”
The loan provider, a Florida-based lender with a national single tenant net-lease platform, provided Pheasant West LLC with an $18.9 million, 10-year loan, with an 8-year fixed rate of 4.65 percent, and an amortization of 20 years.
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
