Funding Purpose
Tauro Capital Advisors was exclusively engaged to refinance a single tenant office building in Culver City, CA. The Sponsor had a loan maturity upcoming and needed a new permanent loan to replace the existing financing. The loan proceeds of $2.8MM allowed the borrower to refinance, pay for all closing costs, and provided cash out.
Property Description
The Sponsor has owned the property for over 15 years and has always maintained strong occupancy at the building. The Sponsor’s business plan is to continue to hold the asset as a long-term investment given its stellar location and proven track record of generating great returns.
Sponsors
The 12,000 square foot building is part of a larger business park in Culver City. While the property can be leased to two users, it is currently occupied by a single tenant who expanded into the second floor during their current lease term. When renovated in 2019, the building was upgraded with glass offices, new kitchens, and more access to natural light.
Challenges
- Tenant only had 12 months remaining on their lease, without any indication on whether or not they would use their option to extend.
- Loan maturity date approached rapidly.
- Currently the Sponsor’s only investment property.
Solutions
- To offset the pending lease maturity, Tauro Capital Advisors structured a loan that provides the Sponsor with cash out that can be used to re-tenant the building if needed. However, the lender did not hold these funds in a reserve account and they can be used at the Sponsor’s discretion.
Funding
- Loan to Value: 52%
- Interest Rate: 6.00% Fixed
- Loan Term: 5 Years
- Amortization: 25 Years
- Prepayment: 3.0% of Outstanding Loan Balance
- Guaranty: Full Recourse
