Inland Mortgage Capital, LLC (“IMC”) announces the closing of a $7,500,000 non-recourse bridge loan on a medical office building in Suwanee, GA. The loan will be used to refinance an existing loan, for future tenant improvements and leasing commissions.
The three-story, 52,410 SF property contains a diverse mix of medical tenants throughout 17 suites, with a physical occupancy rate of 70%. The deal was highly structured in that the Borrower had bought the deal as a single tenant credit master lease nearly 15 years ago, and the lease will be expiring at the end of 2019. With the pending expiration of the master lease, the Borrower had arranged to enter into direct leases with the various doctors who were subleasing space in the building.
Despite the efforts, the building was going to have a dramatic reduction in Net Operating Income within a few months of the closing, due to the master tenant wishing to reduce its obligations at the building.
The property was very well-located near two hospitals, and many of the existing medical tenants have expressed an interest in extending their leases and/or expanding within the building. In addition, the submarket is growing exponentially.
The Borrower needed a Lender with extreme flexibility that could close quickly, as it was facing a pending maturity date of its existing loan, and an expensive fee for going past the maturity date. In addition, the Borrower was unable to meet the pre-leasing requirement in the initial terms due to one of the tenants being unable to sign the extension in time.
IMC structured around the obstacle for the Borrower and got the deal closed. The Borrower should be in good position to seek permanent financing with the cleanup of the unusual structure and will be able to execute on perm financing, “when ready”, due to Inland Mortgage Capital not requiring any prepayment protection.
