Location: Santa Clarita Valley, California
Property type: Self-Storage
Transaction type: Construction-to-Perm
Loan amount: $21,700,000
Rate: 4.75% Fixed
Term: 1 + 5 (12 Months Construction, then 5 Years Perm)
Amortization: 3 Years I/O then 30 Years Amortization
LTC: 80%
Guaranty: Completion Guarantee

Team Hachem successfully secured a high leverage $21,700,000 non-recourse, Construction-to-Perm loan to develop a six-building, 966-unit, climate-controlled, Class-A self-storage facility near Stevenson Ranch in the Santa Clarita Valley, California.

The Sponsor, while very experienced in other asset classes, engaged the Hachem Team to source the full capital stack (debt, equity and carve-outs guarantor) for his first self-storage project. New Building & Safety codes that took effect in 2020 resulted in increased costs and delays. In order to obtain certified pads by the end of 2019, the entitlements in-place had to be vetted and the horizontal work needed to start prior to securing construction financing. The impacts of Covid-19 resulted in multiple delays from subcontractors, County inspectors, and in pulling permits due to County offices being closed.

The team was able to source an investor from its pool of strong relationships who provided the equity. Antonio and team focused on the market necessity for storage units in the desirable and growing community of Santa Clarita Valley, and successfully negotiated an agreement with Public Storage to operate the facility. Team Hachem identified a capital provider to not only extend the financing commitment multiple times, but also to execute a structured, non-recourse, low-rate loan with the same terms agreed upon prior to Covid-19.

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