Barry Slatt Mortgage Chief Operating Officer Michael Kaplan successfully arranged a $12,600,000 permanent loan to facilitate the refinance of a single tenant net leased retail portfolio. The portfolio consisted of 5 single tenant properties leased to national tenants including Big Lots, Safeway, Bashas, 99 Cent Only and Fallas.
The loan presented two main challenges. First, the remaining lease terms had on average less than 7 years. Second, the requested leverage resulted in a debt yield below 7.75%.
Mr. Kaplan was able to secure a lender that was willing to take on the tenant roll over risk during the term based on the strong locations of the stores and strong tenant sales. The lender was able to push the proceeds and closed the low debt yield loan by crossing the individual properties and providing the borrower with competitive release structure. The loan provided the borrower with a non-recourse 10-year fixed rate loan with interest only for 3-years followed by a 30-year amortization.