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Retail Center

The Madison Group arranges $1.3 million loan for purchase of retail center

Tags: retail center financing, commercial loans, Utah commercial financing
Wednesday, Mar 14, 2018
by Barb

The Madison Group arranges $1.3 million loan for purchase of retail center

The Madison Group (TMG), a leading source of retail financing nationwide, arranged the $1,300,000 loan for the purchase of a retail center in Utah. The borrower was interested in an aggressive rate to receive maximum cash flow. The finalized terms of this loan were a 4.3% interest rate, 5-year fixed term and a 10-year maturity on a 25-year amortization. The loan has no prepayment penalty, which provides ultimate flexibility for the investor.

The property is an existing 5-unit retail center containing 8,799 square feet of gross leasable space. Significant improvements were made in 2013 and all spaces are currently 100% leased.  The property is located on a busy north/south corridor in West Valley City, Utah.

Among the challenges the property presented to completion of the transaction are that one tenant occupies more than 40 percent of the retail center, which is leased primarily to local “mom-and-pop” businesses.  The retail property is visible while driving south but not as well while driving north.

In order to make this a great loan, TMG worked to find a lender that could understand the local market. The current market is interested in “Amazon proof” tenants and TMG was able to work through this with underwriting. The buyer wanted cash flow and flexibility. The loan terms allow for excellent cash flow and the ability to trade the property without a prepayment penalty.

 Retail centers that do not have credit tenant occupants are becoming more difficult to finance,” said Jeff Meierhofer, TMG’s director of Finance.  “That requires digging deep with underwriting and helping them understand the value of service-related businesses.”

The financing was arranged by Jeff Meierhofer at The Madison Group.

The Madison Group (www.madisongroupfunding.com) 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 and Meierhofer can be reached at 435-785-8350 or by emailing Jeff at Jeff.M@madisongroupfunding.com.