LOS ANGELES—To ensure a speedy transaction, the American Musical and Dramatic Academy secured a short-term hard-money loan for the acquisition of its new office building in Hollywood. In an earlier story, GlobeSt.com reported that AMDA purchased the 19,750-square-foot office building from Hello & Co. for $10 million. AMDA financed 50% of the purchase with a loan funded by Lone Oak Fund.

“The Hollywood market is very hot right now,” Alexa Mizrahi, a senior loan officer at Lone Oak Fund, tells GlobeSt.com. “The buyer needed a quick close to beat out the competition. A successful close of escrow was imperative for this buyer to expand its current campus.” The loan has an 18-month term with 8.3% interest only. Because the borrower was able to secure this type of short-term loan with 50% cash down, the transaction was complete in less than 30 days.

An 8.3% interest rate may sound high for a bank loan, but for a short-term interest only loan, Mizrahi explains that it is extremely competitive. “The advantages of using hard money include speed, service, and certainty of execution. Lone Oak Fund never has a prepayment penalty, so the borrower can pay us off with a less expensive bank loan as soon as interior improvements are completed,” she says.