The Centennial Office Park Loan is secured by a first mortgage lien on the Borrower’s leased fee interest in a 59,549 square foot multi-tenant office park, (the “Property”) located in Las Vegas, Nevada. The Sponsor was having difficulty in sourcing long term fixed rate debt that would bridge the large gap between his current debt and conservative 70% loan to value. He also had passive investors that have been in this property since 2006. The 3-building Property is currently 97% occupied and has out-performed the market. One of the buildings is operated as an Executive Suite and is currently 94.60% occupied.
The Centennial Office Park has an outstanding loan balance of $3,902,170 with a 1st Trust Deed from Mountain Credit Union and a 2nd TD from Zions National Bank. The Partnership is being recapitalized for total of $4,458,000 of which $1,000,000 is to be held back and paid out quarterly so long as the property performance has not declined.
The proposed loan of $8,400,000 from Red Oak Financial is a 12-month Bridge Loan with two 6-month renewal options. The rate is at 8.25% fixed and accrues an additional 3.00% for a coupon of 11.25%. Red Oak Capital will receive a 1.75-point Lender Fee and Red Oak Financial will receive a 1-point fee. In addition, Red Oak Capital will receive a 2-point Exit Fee. The IRR is estimated to be 16.58 in Yr. 2 and 14.71 in Yr. 3.
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