Inland Mortgage Capital, LLC (“IMC”) is pleased to announce the closing of a $6,550,000 non-recourse bridge loan. The loan proceeds were utilized to acquire a 10,450 SF office building in the Financial District of downtown San Francisco.
The five-story property was 56% occupied by three tenants at the time of the acquisition, with the rest of the building pre-leased to an affiliate of the Sponsor. The building needed modernization to the lobby, roof, elevators and sprinkler system. Additionally, the basement space needed to be gutted and rehabbed for use by the new tenant. Moreover, the Borrowers were structured with three Tenant in Common entities, and one entity was subject to a reverse 1031 exchange.
IMC was able to structure the loan around these unique underwriting characteristics and mitigated the concerns by the downtown San Francisco location, the strength of the local office market, as well as the Sponsor’s experience and willingness to guarantee the affiliated lease. Further, the non-affiliated tenants were at below market rents, and upside was potentially available when their respective leases were set to expire.
IMC does not charge interest until the future advances are funded which was helpful to the Borrower due to a rather sizable capital improvement and leasing cost budget. IMC was able to structure the deal so that it was freely pre-payable at any time, providing the Borrower with a potential opportunity to tap into lucrative SBA financing, if and when the timing is right.
