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 (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 can be
reached at 435-785-8350 or by emailing Kesselman at
angela@madisongroupfunding.com.