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Loans for Grocery Stores

TMG arranged the $1,610,000 loan for a triple net lease (NNN) grocery store in Utah

Tuesday, Mar 06, 2018
by Barb

The Madison Group (TMG) arranged the $1,610,000 purchase money loan for a triple net lease (NNN) single tenant grocery store in Utah. The borrower had a 1031 exchange to satisfy and needed a timely closing with a short due diligence. TMG secured the financing with a 7-year fixed rate of 4.65 percent and a 25-year amortization.

The client designated a NNN leased grocery store in Riverdale, Utah as the exchange property.  The project is currently under construction to fully update the interior and exterior of the building.  The sellers escrowed the funds at close for the remodel. 

The in-place tenant has been at this location for 16 years and has 14 years remaining on the lease with another 15 year option to extend.  The tenant has had declining sales, but anticipates that the property remodel and re-lease of vacant adjacent big box space should increase sales again.  The lease is absolute NNN.  The owner of the grocery store personally guaranteed the lease.

The loan experts at The Madison Group were able to find a lender that was comfortable with construction currently underway.   The construction contract was between the tenant and contractor, so the owner had no control, except for the distribution of funds.  The bank agreed to hold the funds and disburse them as the construction completes.  This lender also had to become comfortable with the tenant’s declining sales, which TMG was able to mitigate with strong financial backing and strong market demand.  All of this had to take place in a relatively short timeframe, due to holidays and the 1031 exchange along with a 45-day purchase contract. 

The borrowers were shopping for a replacement property and found this particular property that they wanted to own,” said Angela Kesselman, TMG’s associate director of Finance. “We were able to offer them a loan with flexibility and speed of close.   We also helped them through the construction complications.  They are excited to have added a property to their portfolio that will provide stable long-term income and also will be completely rehabbed in just a few months.  The NNN lease will also insure minimal management of the property moving forward,” said Kesselman.

The financing was arranged by Angela Kesselman at The Madison Group.

The Madison Group ( is a commercial loan broker and consultant specializing in financing for investor properties nationwide. TMG provides flexible and reliable capital for real estate acquisitions, refinances, and re-capitalizations for a variety of property types including:  multifamily, mobile home parks, credit tenant NNN net lease, office, retail, industrial, self-storage and other commercial properties in the United States.  Established in 2001, The Madison Group’s intention is to provide highly competitive loan products through its superior capital market expertise and quality sources of capital.  TMG works efficiently and effectively to get the transaction closed and funded.

The Madison Group can be reached at 435-785-8350 or by emailing Kesselman at