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The Madison Group Arranges $3,975,000 Refinance for Multifamily in Utah

Tags: Multifamily loan, Apartment loan, townhome loan, Utah loan, commercial mortgage loan
Thursday, Dec 07, 2017
by Barb

The Madison Group (TMG), a leading source of multifamily financing nationwide, arranged the $3,975,000 refinance for a townhouse apartment complex near Logan, Utah. The newly constructed complex consists of 54 units. The borrower was interested in getting a rate and term refinance of the in-place construction loan. The finalized terms of this loan were a 4.40% interest rate with a 5-year term and a 30-year amortization.

The property occupies 4.45 acres along 400 South in Smithfield, Utah, north of Logan.  When completed, the complex will include 12 two-story buildings with two-bedroom, three-bedroom and four-bedroom rental apartments.  Each unit will be furnished with a range/oven, built-in microwave oven, refrigerator, garbage disposal and dishwasher.  The complex will also include off-street parking spaces for 124 vehicles.

The occupancy factor for the area is over 95 percent. The borrowers have a successful track record for a similar style product in the area. A waiting list already exists for the apartment units which are being rented as soon as they come online.

 Among the challenges to the completion of this transaction, the appraiser took more than two weeks to provide revisions to the appraisal report; a Phase I environmental report needed to be ordered; and before the loan was able to close, the Certificates of Occupancy needed to be completed.

The team at Madison Group stayed in contact with the lender and borrower to make sure the transaction was proceeding smoothly and in very timely matter. They ordered the Phase I report and stayed in contact with the engineer to answer any questions that needed answering. Direct and consistent daily communication ensured the transaction would close on time.

 “Our team went above and beyond for our repeat client with a great project to get a timely closing of his multifamily project,” said Jeff Meierhofer, TMG’s Director of Finance.

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The Madison Group arranged the $1,450,000 loan for a purchase of a NNN Car Wash

Tags: Credit Tenant, NNN loans, car wash loans, purchase financing, life insurance loan, Non-recourse
Wednesday, Nov 15, 2017
by Barb

The Madison Group (TMG), a leading source of Triple Net Lease financing nationwide, arranged the $1,450,000 purchase loan of a Mister Car Wash in Tucson, AZ.  The borrower’s goals were to purchase this triple-net asset with a long term self-amortizing loan. TMG secured the financing with a life insurance company on a 20-year fully amortizing fixed rate of 4.67%.

The property is a Mister Car Wash with a 20-year absolute triple-net corporate lease and approximate 2 per cent annual rent escalations. Mister Car Wash is the country’s largest operator of conveyor car washes. The car wash is at the intersection of Midvale Park Road and Irvington Road, easily accessible from Interstate 19. The Irvington Road exit from the freeway leads directly to the car wash.  Being in close proximity to a regional shopping center, the site benefits from high traffic counts of more than 44,000 vehicles per dayMister Car Wash currently operates 229 car washes and 34 lube centers across the United States. With 15 locations and their corporate headquarters in Tucson, they have the strongest presence of any operator in the city.

The borrower sold several properties and was looking for an asset that required little management and offered long term security.  He chose this NNN asset as his replacement property.  “Car washes are a more difficult asset to finance,” said Angela Kesselman, associate director of financing for TMG, “but with the strength of the tenant and the large down payment, we were able to get a life insurance company to finance the purchase.”

The borrower was able to purchase the property with a 20-year loan and a low 20-year interest rate.  The loan will be paid in full at the end of the lease and should receive regular lease payments as income for the next 20 years. 

 The loan we secured for our client will ensure that he has long-term income and no debt at the end of the lease, which was a big selling point for him,” said Kesselman.

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The Madison Group Arranges Cash Out Refinance for an Office Tower in Colorado

Tags: Office Refinance, Office Building loans, Commercial Office Financing, Cash out Loans
Monday, Nov 06, 2017
by Jeff Meierhofer

The Madison Group (TMG), a leading source of office financing nationwide, arranged the $2,500,000 cash out refinance with a $200,000 line of credit for an office building in Colorado. The property consists of two eight-story buildings with 28 office units. The borrower’s goals were to get a cash-out refinance to lower his current rate and renovate some units within the building.  The finalized terms of this loan were a 5% interest rate, 5-year term, and a 25-year amortization. 

Located in the city of Centennial, approximately 14 miles south of Denver, the twin-tower office complex is adjacent to East Arapahoe Road, a major arterial serving the Denver-Aurora metropolitan area.  Tower number 1 has rental space for 26 tenants while tower 2 has space for 20.  The combined 85,000 square-foot complex features parking for 215 vehicles, including some enclosed garage parking beneath the towers.

Obstacles hindering consummation of this loan were low occupancy in the office space with many tenants leasing on a month-to-month basis, rather than holding long-term leases.  Additionally, varying re-purchase dates of several condominium office units required the loan originator to conduct rigorous research, calling various title companies to acquire needed documentation.  Another challenge was attempting to retrieve required documentation from one of the borrowers, a very busy state senator.

 “We worked hard on finding a lender as the borrower continued to increase occupancy while the loan was being developed,” said TMG’s Loan Processor Brandi.  “We remained in constant contact with the lender to get them what they needed and to satisfy all their conditions. Working diligently with title companies to ensure everything, such as payoffs, kept this file moving along.  Ultimately, the borrower received great loan terms.”

“We faced a lot of struggles and obstacles but after 11 months of keeping on top of the file and fighting through the challenges, we were able to close on this loan,” said Jeff Meierhofer, TMG’s Director of Finance.

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

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The Madison Group Arranged the $2,553,500 Loan for the Purchase of an Apartment Complex in Utah

Tags: apartment financing, apartment loans, multifamily loans, non recourse loans
Monday, Nov 06, 2017
by Barb

The Madison Group (TMG), a leading source of multifamily financing nationwide, arranged the $2,553,500 purchase of a 32-unit apartment complex in Taylorsville, Utah. The borrower’s goal was to maximize the amount of dollars available. TMG secured the financing with a FNMA 15-year fixed rate loan at 4.60% and a 30-year amortization.

The apartment complex, in a tucked away location south of Salt Lake City, consists of two 16-unit multi-plexes with 24 two-bedroom units and 8 three-bedroom units.  Residents generally pay a premium for these open townhome style units with upstairs bedrooms and basement garages. The townhomes feature light, open design with skylights, and each unit has a laundry room and three bathrooms. Attached garages have 14-foot and 21-foot deep parking spaces that allow one short and one long vehicle. Additionally 21 parking stalls are onsite. A condominium plat has already been recorded for the option of future condo conversion. Although the complex is in a secluded location, it offers quick access to freeways, the Salt Lake International Airport and shopping.

Owner managed units have kept great tenants but at very low rents. Unit square footage has been approximated in market study at 1,200 sq. ft. per two-bedroom unit and 1,450 sq. ft. per three-bedroom unit. The complex is located right off 5400 South with easy access to Bangerter Highway. Nearby shopping includes Jordan Landing, Smiths grocery and Walmart.

 “The borrower came to us to figure out a way to purchase the property with maximum leverage,” said Loan Officer Angela Kesselman.  “The challenge was that the rents were much below market, which restricted the cash flow on the project.  We typically underwrite multifamily at a 1.25:1 debt service coverage which did not qualify the property for a full loan amount.

 “This purchase is a long term hold for the buyer so we put them into a Fannie Mae 15-year loan with a 30-year amortization through FNMA financing.  This particular loan allows the borrower to pull cash out of the project once the project is at market rents.  They had the cash to close, but decided not to take the rate risk now, and instead lock in a low rate, 15-year fixed term on the purchase. They can advance additional funds as the debt service coverage increases over time, therefore hedging their long-term rate.

 This specific type of loan worked well for the borrower’s needs.  They were able to purchase a nice multifamily project that was in excellent condition and they locked into a great long-term rate on a property that had below market rents.  It should perform well for them moving forward,” said Kesselman, TMG’s Associate Director of Finance.

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

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The Madison Group arranges $1,900,000 cash out refinance for Mobile Home Park

Tuesday, Sep 26, 2017
by Jeff Meierhofer

The Madison Group (TMG), a leading source of Mobile Home Park financing nationwide, arranged the $1,900,000 cash out refinance for a mobile home park in Siler City, N.C. The Country Living Estates MHP consists of 147 pads on 53.6 acres. The borrower was interested in a longer amortization loan with a fixed rate of 7 to 10 years. The finalized terms of this loan were 4.23% interest rate, 10-year term, and a 30-year amortization. 


The borrowers continuously upgraded this property during their 10 years of ownership.  They sought to return capital infused into the park and cash out for continued updates to the mobile home park.  Based on net operating income of approximately $250,000 and an 8 percent cap rate, the current value of the property is in excess of $3 million. The borrowers were able to utilize the new higher value to achieve their financial goals.


The property is located west of Raleigh and south of Greensboro at U.S. Highways 64 and 421.  It consists of 147 mobile home pads of 10,000 square feet each, which all can accommodate double-wide homes.  Most mobile home parks in the immediate area are single-wide parks.  Currently the park is 100 percent occupied.

    

A nonrecourse loan was needed based on the underlying ownership of the property. Great care was taken by the lender and the borrower to provide proper documentation for the ownership by the revocable trust. When the park was purchased, many of the homes were rental units. Over the years, individuals who rented became owners of those mobile homes and title to the units had changed. It was necessary to change the title on individual units to finalize this transaction.


TMG’s processing staff worked diligently with the legal departments for the lender and the borrower, and was able to facilitate title changes with the Department of Motor Vehicles. This solved what seemed like an insurmountable hurdle with underwriting. By doing so, the borrower was able to achieve the desired cash out and a long-term nonrecourse loan with an excellent rate.


Sometimes processing has to go the extra mile to make something work and to solve the really hard issues. It took a lot of patience from the borrower, lender and all parties involved. But in the end, the borrower is very pleased.” said Jeff Meierhofer, TMG’s Director of Finance.

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 Jeff can be reached at 435-785-8350 or by emailing Jeff at Jeff.M@madisongroupfunding.com.

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