Retail Center financed by TMG
The Madison Group (TMG), a leading source of retail financing
nationwide, arranged the $1,120,000 loan for
the purchase of a retail condominium unit in
Park City, Utah. The borrower’s goals were to purchase
the property with a short-term lease in place. TMG
secured the financing with a fixed rate loan of 6.5% with 5-year
resets, a 15-year term and 25-year amortization.
The property,
which was built in 1994, is ideally located in Park City, and is a 4,865-square-foot,
single story in-line retail condo. The buyers, a multiple member LLC, currently
own Suites B, D and E in this retail strip center. After completion of this purchase, the group
will own more than 51 per cent of the project and control the HOA. The seller
will remain as the tenant for six months.
Among the
challenges TMG faced in securing the financing, the borrowing group is based
out of state and the seller wanted to stay in the property as a tenant for six
months after close. With a short-term
lease in place, TMG needed to find a lender that understood the low vacancy and
growth in this particular market and was confident a new long-term tenant could
be put into the space.
TMG found a credit
union willing to offer a loan that allowed the borrower to purchase the
property with a short-term lease with no prepayment penalty. TMG closed within a 30-day period, because a
1031 exchange on the seller’s side of the transaction had to be met. The appraiser confirmed the shortage of
retail inventory in the market mitigating the short-term lease with the
lender.
“This loan satisfied all of the buyer’s
needs,” said Angela Kesselman, TMG’s associate director of Finance. “With the purchase of this unit, along with
the existing ownership of the other units, the buyers have a long-term plan for
the property that they will now be able to execute with a flexible lender in
place,” Kesselman
said.
The financing was arranged by Angela Kesselman at The Madison Group.