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$2MM loan for purchase and construction of two Retail sites

Tags: Retail financing, Construction loans,
Tuesday, Feb 23, 2021
by Angela Kesselman

Summary:  The Madison Group (TMG), a leading local lending source for construction financing,  arranged the $2M construction loan for the buildout of two spec retail properties located in the Utah.

The buyers of two pads came to TMG for a purchase money loan on two parcels, one that was gray shell and the other that was vacant.  The seller had plans in place for construction on the empty pad.  They negotiated a long escrow, while looking for tenants for the spaces.  

The borrowers goals were to buy the properties “as is” and build out the space as needed.  Retail has been a difficult property type to finance during the pandemic. 

TMG was able to source a lender that would allow them to fund the purchase and the TIs on the first building with one LOI in place for 50% of the space.  The lender closed on this piece first, then closed on the purchase of the empty pad with a construction loan. The buyers negotiated a lease for 100% of the space with a local restaurant.  TMG was able to act quickly and get the lender and the appraiser on board to finish out both loans and complete the sale along with the construction loan.

Location:  Utah

Property:  Two retail buildings

Loan Amount: $2,000,00 combined

Interest Rate:  4.25%

Loan Terms:   1 year construction at prime plus 2% with a takeout loan of 4.25% on a 15 year term, with 5 year rate renewals.

Amortization:   25 Years

Prepayment: None 

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