Broadway Center – Permanent Refinance

Tempe, AZ

$4,550,000

Funding Purpose

Tauro Capital Advisors was engaged on an exclusive basis to replace the sponsor’s floating-rate bridge loan with permanent financing. The new loan provided the owners with cash out and a fixed interest rate.

Property Description

The sponsor is an experienced value-add owner and operator of retail centers. Over the last 18 months, the sponsor increased occupancy from 45% to 100% to stabilize the property. The new financing allowed for a return of capital to investors, increasing their cash on cash returns moving into the future.

Sponsors

The 30,000 SF multi-tenant retail center was built in 1981 and is located on the corner of a prominent intersection in Tempe, just one mile off a major freeway and close to ASU’s main campus.

Challenges

  • Treasury rates had been whipsawing up and down without any stability. An increase in rates would have limited loan proceeds to a lower level. The borrowers wanted to secure a loan to provide a fixed rate, cash out, and a minimal prepayment penalty.

Solutions

  • Tauro secured a lender that was able to lock the interest rate at application to avoid any interest rate risk throughout closing. The lender was able to provide a 3-year loan term with a minimal prepayment penalty. The loan also has the ability to extend for three year terms at market rates.

Funding

  • Interest Rate: 6.25% fixed
  • Initial Loan Term: 3 years
  • Loan Extension: 9 extensions x 3 years
  • Amortization: 30 years
  • Prepayment: Yield maintenance
  • Guaranty: Full Recourse