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California  + San Diego  + Finance  | 

Borrowers Still Have the Upper Hand with Interest Rates

Lending terms with low interest rates and locking abilities continue to favor borrowers. The owner of two San Diego properties was able to take advantage of those conditions in order to refinance the assets.

The multi-tenant industrial building is 99,340 square feet and 100 percent leased to four tenants. It has a 27-foot clear height, 29 truck doors and all-concrete parking. The multi-tenant office building is a 54,496 square-foot two-story building that is 90 percent leased to 16 tenants.

A $10.02 million refinance of the buildings was structured with 10-year loan terms on a 30-year amortization schedule. Steve Hollister, senior vice president of NorthMarq’s San Diego and Boise offices, arranged the loan. NorthMarq negotiated the fixed-rate loans for the borrower through its correspondent relationship with a life insurance company.

“The life insurance company that provided these two loans refinanced their existing 10-year loans for the borrower that matured in November 2021 and January 2022,” said Hollister. “Given that the life company held the maturing loans on their books, they were able to provide a 25 percent discount on the yield maintenance prepayment penalties. Combining this with excellent interest rates and 30-year amortizations on the new loans, along with the ability to lock the rates well in advance of the loan maturities, was very compelling to the borrower. The loans closed at rates that were much lower than the current market rates at that time. The execution provided a win/win for both the borrower and the lender.”

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About Lisa Brown

Lisa Brown has decades of experience in corporate communications and marketing management with organizations including Coldwell Banker Residential, Grubb & Ellis, Marcus & Millichap, NAIOP, SIOR and ALM. In those positions, she worked in conjunction with chief executive officers and chief marketing officers to create corporate messaging, cohesive branding standards, strategic marketing plans and thought pieces. Brown is a frequent speaker at industry events and an editing adjunct professor for an online course. She has a master’s degree in mass communications from San Jose State University.

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