LOS ANGELES—Eagle Group Finance has funded a bridge loan for a medical office building in the Wilshire corridor of Beverly Hills. The two-year $17 million non-recourse loan will be used to refinance an existing maturing loan and to fund tenant improvements. The lender was particularly attracted to the deal because of the inherent value of medical office in that corridor.

"Medical office is an attractive investment opportunity because it provides higher barriers to entry," Brian Good, president of Eagle Group Finance, tells GlobeSt.com. "It is typically hard to get zoning for medical office, and once you get it zoned for medical, it becomes more valuable. As a lender, we like that. This corridor in particular, is a gateway. It has pizazz and notoriety worldwide. In this corridor up and down Wilshire Boulevard, medical office buildings are off the charts in terms of value. We also see the big hospitals, like USC and UCLA wanting to get in to that corridor and have a presence. With minimal vacancy, it seemed like a really good loan to make." 

The borrower came to Eagle Group looking to obtain temporary financing to complete tenant improvements before securing more permanent financing though a bank. "We are a transitional lender, so borrowers are coming to us when they are doing lease-ups or if the loan is coming due and they are not quite ready to get a permanent loan," says Good. "In this situation, their loan was coming due, and they didn't want to go to a bank yet because they wanted to get the property leased up." Good wouldn't disclose the rate of the loan, but did say that it was in the firm's range of 8% to 12%.

Although Good admits that they aren't the cheapest option, he says that they stay competitive with good due diligence and a reputation for reliability. "There is always some shopping, and I encourage others to look, but we are really straightforward and we do what we say we are going to do," he says. "We do a lot of due diligence up front and we close on what we say we are going to close on."

It isn't only the Wilshire corridor market, which has been historically active for medical office because of its proximity to UCLA, but other L.A. markets are also appealing for medical office. Particularly Downtown Los Angeles, which has some medical office development. The developers of a project at Hoover St. and Washington Blvd., noted in an earlier story that the submarket was medically underserved.