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Low Interest Rates Increase Senior Debt Demand

LOS ANGELES—After closing five senior debt loans totaling $74.4 million, Quantum Capital Partners discusses how low interest rates are driving competition in the capital markets.

By Kelsi Maree Borland | Updated on January 21, 2015

LOS ANGELES—Low interest rates are driving competition in the capital markets, according to Quantum Capital Partners managing director Mike Yim. Illustrating this trend, Quantum Capital Partners’ Kim and managing director Jonathan Hakakha have closed five senior debt loans totaling $74.4 million. The loans went to retail and multifamily properties throughout Los Angeles.

The five loans include a $32 million 10-year non-recourse loan with a loan-to-value of 67% for an 89,000-square-foot retail showroom in Downtown Los Angeles valued at $48 million. The loan proceeds will be used to pay off a previous loan and retain $10 million in cash. “The property featured a very high price per square foot rent and valuation,” Yim tells GlobeSt.com. “Through diligent market research, we were able to substantiate the high per square foot rent and valuation to the lender. The strength of the market, combined with the track record of the sponsors, help to mitigate the lender’s concerns about the valuation.” This was the largest loan secured of the five.

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