HOUSTON--Grandbridge Real Estate Capital has secured a $6.2-million bridge loan for a Clear Lake office building owned by a sovereign wealth fund operated by the Republic of Nauru, GlobeSt.com has exclusively learned.

The two-year loan was provided to the Nauru Phosphate Royalties Trust, a subsidiary of Nauru Realty Trust, by a direct small-balance commercial real estate lender. Adam Lipkin, vice president of Grandbridge's Miami office led the deal.

With just under 10,000 inhabitants, Nauru is the world's smallest island nation. Its government developed the Nauru Phosphate Royalties Trust to invest proceeds from a state-owned mining company.

Over the years, the trust has invested in numerous U.S. real estate assets, including the six-story, 138,633-square-foot single-tenant office building at the corner of Bay Area and Space Center boulevards in the Clear Lake submarket of Houston. The trust acquired the property free and clear in 1993.

The loan facilitated by Lipkin provides a short-term financing solution for the Houston office building, which is occupied by Jacobs Technology, a wholly owned subsidiary of publicly traded NASA contractor Jacobs Engineering Group. Jacobs provides technical, professional and construction services to various industrial, commercial and governmental clients.

"It became clear the trust needed prepayment flexibility so that it would not get hit hard with burdensome early exit fees," Lipkin said.

Lipkin had to overcome several challenges to complete the deal. The Houston office market has been hit hard by the decline in oil prices. Additionally, the inherent risk of a lease maturing in several years was too challenging for many lenders. The transaction also had to close in a tight 30-day window by the end of 2015.

Lenders were also concerned about having a foreign entity act as the non-recourse carve-out guarantor for the loan.

"With everything going on around the world and the currency devaluation in many countries, U.S. real estate assets are a safe haven for a lot of international business owners and high-net-worth individuals," Lipkin says. "But they struggle to find available financing. This deal is an opportunity to show these investors that creative financing solutions do indeed exist."

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