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.