Industrial Building Loan Leverages 10-Year Lease

A $25.2 million permanent fixed-rate loan was recently secured for a 360,022-square-foot industrial building in Murrieta, CA. The building is 100 percent leased for 10 years to a non-credit single tenant. The property is a concrete tilt-up warehouse building with a 32-foot clear height, 51 dock-high and two grade-level loading doors.

The transaction was structured with a fully amortizing 25-year loan with a fixed rate of less than 3 percent. NorthMarq arranged the financing through its correspondent relationship with a life insurance company. Steve Hollister, NorthMarq senior vice president, was the point person on the loan.

“NorthMarq’s correspondent life insurance company won this business by offering very attractive loan terms. The rate was locked at loan application and allowed five months for funding,” said Hollister. “The forward commitment enabled the borrower to take the interest rate risk off the table while waiting for construction to be completed and the lease to commence. In addition, due to construction and occupancy delays, the lender was flexible and granted an additional one-month funding extension and agreed to close the loan when the tenant was in occupancy but not yet paying rent.”