Funding Purpose
Tauro Capital Advisors, Inc. was exclusively engaged to refinance a seller carryback note for a multi-tenant retail center in Phoenix, AZ. The borrowers were focused on returning their original equity investment and having flexibility with their prepayment on a new loan.
Property Description
The Sponsor purchased the 22,000 square foot property during the middle of the pandemic, in late 2020. Over the last three years, the Sponsor built a new single tenant building on the hard corner pad and has nearly doubled the rental rates of the in-line space. The property is directly in front of a well-located power center anchored by Costco.
Sponsors
The Sponsor is an experienced retail investment firm with a diverse portfolio of assets throughout the Phoenix market. Their expertise in value-add opportunities has created outsized returns for their investors.
Challenges
- The Sponsor greatly increased the property value since acquisition. A portion of the new loan proceeds went towards providing significant cash out and future tenant improvements. Two new tenants were in free rent period and were not yet paying rent.
Solutions
- Tauro sourced a provider comfortable with returning almost all of the Sponsor’s original equity investment, which most lenders were reluctant to do. Tauro circumvented the need for any borrower deposits. Interest only for nine months provided cash flow relief until new tenants pay rent.
Funding
- Loan Amount: $4,522,000
- Interest Rate: 6.50% Fixed
- Loan Term: 5 Years
- Amortization: 25 Years
- Interest-Only: 9 Months
- Prepayment: 3%, 2%, 1%, Open
- Close Date: 7/25/2023
