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The Madison Group arranged a construction/perm loan for a multi-unit industrial property in Utah

Tags: Construction Loans, Commercial Financing, Multi-unit Financing, Owner Occupied Financing, No Prepayment Penalty, Industrial Financing
Sunday, Oct 31, 2021
by Angela Kesselman

Summary:  The Madison Group (TMG), a nationwide source for construction financing, arranged a $2.5M loan to build a multi-unit industrial building in Heber, Utah.

The Borrower worked with TMG to acquire the funds needed to build-out a new property in Heber UT on a parcel of land they acquired last year. The Borrower’s goal was to break ground as quickly as possible, so they could build and occupy one of the spaces prior to their current lease expiration date. There were no other lease LOIs on the property, except for the owner-occupied unit.

TMG met the Borrower’s goals by arranging a 1-year construction loan followed by a permanent loan once construction was completed. The property was considered speculative construction given only one unit had an arranged tenant; therefore, it was important to source a lender who could accommodate the limited lease LOIs. TMG not only sourced a lender that accommodated the limited occupancy, but also allowed the development fee to be considered equity in the total project costs. Given the Borrower’s strength and the project’s location, TMG was able to negotiate a higher leverage of 75% LTV.

The borrower’s goals were met and the project is under construction and moving forward to stabilization.

Location:  Heber, UT

Property:  Industrial

Loan Amount: $2,500,000

Interest Rate:  4%

Term:   1 year construction followed by a 10-year term perm

Amortization:  Interest Only for construction; 25-year for permanent loan

Prepayment:   None

LTC:   75%

LTV:  75%

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