LOS ANGELES—An unnamed owner-user has secured a $21.6 million loan for the purchase of an eight-story office building and parking garage. The 10-year fixed-rate loan carries a 90% loan-to-value, which is unusually high and could illustrate the high competition of capital in the market today.

“Typically banks will only provide this type of leverage for SBA deals, therefore we approached the SBA about a 504 loan, and secured a pre-approval allowing for 85% leverage,” Christopher Farlow, a partner at Sequoia Commercial Lending, tells GlobeSt.com. “We then leveraged the SBA’s pre-approval with two banks, who were willing to provide more than 75% LTV on a conventional basis. Both of the banks have SBA divisions, so if they couldn’t do the deals conventionally at 85%, we still had the SBA 504 as a backup. Once the final underwriting was done, one of the lenders came back and asked what would win the deal. We requested 90% leverage, with a rate that was 2% over the 10-year UST, and a 0.00% loan fee from the bank. The bank agreed and allowed us to lock the rate without a deposit fee.” Farlow and his colleague Brett Twente, a partner at Sequoia Commercial, secured the financing on behalf of the borrower, and declined to name the lender for confidentiality purposes.

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