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Retail Center financed by TMG

The Madison Group arranges $1,120,000 Loan for a Retail Condo

Tags: Retail Financing, Commerical loans for Retail Centers
Friday, Nov 02, 2018
by Angela Kesselman

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.

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Mobile Home Park Loans

Long term Loan - $1,750,000 on a Mobile Home Park in Washington

Tags: mobile home park financing, MHP loans, Manufactured Housing Community loans
Wednesday, Oct 31, 2018
by Angela Kesselman

The Madison Group (TMG), a leading source of mobile home park financing nationwide, arranged the $1,750,000 refinance of a mobile home park in Tacoma, Wash.  The borrowers’ goals were to refinance a note which was due and secure long-term financing. TMG arranged a 10-year fixed rate loan at 4.95% and a 25-year amortization at 70% LTV. 

The well maintained park consists of 40 double-wide pads, one manager’s unit, two RV pads and one duplex. It is 100 per cent occupied and in a good location with high rents. All units are tenant owned.  The property is operated as a senior park for tenants 55 years old and older. The same management has been in place for 20 years

TMG needed to overcome a number of challenges in order to secure the financing. Most significantly, the property was originally financed on a seller note because the mobile home park needed a new sewer system.  The system was completed and TMG was able to finance the new permanent loan with lower sewer expenses because of the new system.  Additionally a portion of the property was located in a flood zone and the county recently imposed strict flood guidelines posing more risk for a lender. Lastly the borrowing entity consisted of five tenants in common, complicating the paperwork. 

In order to succeed, TMG worked with a local credit union that understands mobile home parks and is comfortable with the market for this type of park.  The credit union was willing to resolve the flood issue and work with the multiple borrowing entities to complete an excellent long-term loan for the owners. 

All of the concerns that were initially addressed were satisfied,” said Angela Kesselman, TMG’s associate director of Finance.  “We were even able to have the prepayment penalty waived and the loan assumable to a new buyer to accommodate one of the aging owners.  We found the perfect fit,” she said.

The financing was arranged by Angela Kesselman at The Madison Group
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Multifamily Financing

Recent Closed Loan for an Apartment in Utah

Tags: multifamily financing, apartment loans, construction take out loans
Thursday, Oct 25, 2018
by Jeff Meierhofer

The Madison Group (TMG), a leading source of multifamily financing nationwide, arranged the $4,150,000 refinance for a townhome style apartment project in Northern Utah. The borrower’s goal was to secure a rate and term refinance of the in-place construction loan. The finalized terms of this loan were 5% interest rate, 10 term, and a 30 year amortization. 

The property is a townhome style multifamily complex totaling 102 units located on a 9.04-acre site in Smithfield, Utah. It was built in 2016 and 2018. The units are newly constructed two and three bedroom townhome style apartments. The property has a pool, playground, and a club house. The borrowers have a successful track record for a similar style product in the area. Leasing began in April of 2017 and the property recently achieved full occupancy.

TMG overcame several challenges to ensure the completion of this transaction.   The final lease up was only 30 days ago. Additionally, the borrowers wanted to close quickly on a 30 year amortization with no prepayment penalty. Furthermore, the property is located in a rural market.  TMG worked with the lender that was able to provide flexible terms to allow for future expansion or disposition of the asset.

Our client needed flexibility on prepay, and also a timely closing to hit a certain payoff date.  Because of the success of this transaction, we are now working on the next loan with this repeat client.” said Jeff Meierhofer, TMG’s Director of Finance.

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Hospitality Financing

The Madison Group Arranges a $5,880,000 Loan for a Hotel Purchase in Utah

Tags: hotel financing, hospitality loans, flagged hotel finance experts
Monday, Oct 22, 2018
by Angela

The Madison Group (TMG), a leading source of hospitality financing nationwide, arranged a $5,880,000 conventional loan for the purchase of a flagged hotel in Bountiful, Utah.  The borrower’s goals were to secure a long-term rate with the best possible terms. TMG secured the 10-year term financing with a fixed rate of 5.75%, a 25-year amortization at 75% loan-to-value and no prepayment penalty.

The property, built in 1999, consists of 85 units in one building with a total of 51,839 square feet.  The property is in excellent condition as the seller completed a required property improvement project in 2017.  The buyers have several other hotels in the Utah market and were utilizing a 1031 tax-deferred exchange for the purchase of this property.

Among the challenges TMG faced in arranging this loan was the fact that many of the local lenders that provide hospitality loans are currently out of money for this property type. Furthermore, the buyers have used their SBA allotment, so they needed a conventional loan.  Additionally the property’s revenue had declined in 2016 and 2017 due to the PIP being completed, but the trends show an increase in occupancy since the completion of the repairs to the property.

The team at TMG used its knowledge of the local lending market allowing TMG to reach out to the right local lenders to find a group willing to fund this request at 75% LTV with a good rate and term. 

 We found a lender that offered flexibility with the underwriting, a great rate and term and the ability to close the purchase transaction within the 1031 time frame,” said Angela Kesselman, TMG’s associate director of Finance.

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

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Successful Closing - $20,700,000 Bridge Loan for a Medical Center in Utah

Thursday, Aug 16, 2018
by Jeff Meierhofer

The Madison Group (TMG), a leading source of commercial real estate financing nationwide, arranged the $20,700,000 bridge loan for a triple net lease medical office in Utah. The property consists of a 44,594 square-foot medical center with 8 units well located in the Salt Lake City metro area.  The finalized terms of the bridge loan were interest-only payments for the first 12 months at 425 basis points over the 30-day LIBOR (London Inter-bank Offered Rate). The property owners were able to achieve a 94% loan-to-cost loan.  

A credit tenant (BBB- credit grade) currently owns the businesses in four of the units and has signed a 15-year lease on each of these.  The investment group needed a rate and term refinance of the construction loan to meet their loan maturity date. TMG was able to fund the loan within days of the deadline on this multi-tenant medical facility.

The tenants began taking occupancy in February 2018. The goal of the transaction was to pay off the construction loan by using the current in-place leases, while taking the time necessary to finish tenant improvements and move to stabilization of the net operating income for a future long term non-recourse loan.  Three of the tenants have not yet finished the improvements in their space and one space is vacant.

The timelines for completion of the construction on the project were longer than expected due to architectural changes to the plans, which created a need to close before final leases began. TMG worked closely with the lender to maximize proceeds to pay off underlying construction debt and some return of capital to the owners. TMG and the developer worked with the building owner and tenants to provide a high loan-to-cost loan and a 72% LTV.  

 Everyone needed to be on board to get the transaction completed in a timely manner,” said Jeff Meierhofer, TMG’s Director of Finance.  “We look forward to getting a new cash-out loan for them upon final occupancy.

“There were lots of moving parts on this transaction, but we were able to deliver an excellent product to the investors,” said Angela Kesselman, TMG’s Associate Director of Finance.  “Because three of the tenants had not finished their space, the project became ineligible for a Commercial Mortgage-backed Securities transaction.  Once the tenants move in, we can finalize the transaction with long-term CMBS financing and recapitalize the project.  The bridge loan was a perfect way to achieve everyone’s long-term goals, ”Kesselman said.

The financing was arranged by Jeff Meierhofer and Angela Kesselman 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 e-mailing Jeff at Jeff.M@madisongroupfunding.com.

Kesselman can be reached at 435-659-2200 or by e-mail at Angela@madisongroupfunding.com.

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