Highland Realty Capital recently secured a $10 million fixed-rate loan to refinance the 135,000-square-foot Mill Avenue Business Park in Tempe. The project is comprised of both industrial flex buildings and a traditional office building.

The non-recourse loan was provided by a national bank, and the rate was fixed at 3.15 percent for 10 years with a 30-year amortization. The loan has a more borrower-friendly prepay penalty structure compared to typical yield maintenance, giving the borrower, a tenancy in common structure, more flexibility to prepay the loan in the future.

“Lenders are still understandably cautious on office product right now,” says Highland principal Brad Sevier, “but in this case, most of the income is coming from industrial flex tenants, and there were no significant collection issues at the project as a whole. The project is very well managed.”