Northmarq arranges $15.5M bridge loan for an office building in San Diego, CA
SAN DIEGO (August 29, 2024) — Steve Hollister, of Northmarq's San Diego Debt + Equity team, arranged a $15.5 million bridge loan for an office/medical office building located in San Diego. Built in 1974 and renovated in 2023, the Class B property features 61,286 square feet and was 63% leased to a single office tenant. The vacant space will be leased as medical office or as a surgery center.
“This was a difficult deal to finance given that the asset is office, is 63% leased to a non-credit tenant with 10-months free rent and it does not cash flow initially,” Hollister said. “Despite its challenges, there were numerous strengths, and the lender took the time to understand and get comfortable with the deal. The strength and experience of the sponsor went a long way. The lender closed the loan exactly as advertised.”
Northmarq arranged the financing on behalf of the borrower through its relationship with a life insurance company. The transaction was structured with a 3-year loan term with two 1-year extensions, interest only for the term, a flexible prepayment structure and future fundings for TI/LCs.
The asset was purchased by the sponsor in 2021 for $15.19 million. Since the acquisition, the sponsor has invested an additional $3 million to complete an extensive exterior renovation. The renovation was completed in the summer of 2023, greatly improving the building’s aesthetics and the freeway exposure.
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