Company Newsletter : April, 2007
Marabella Commercial Finance, Inc. who specializes in arranging permanent, construction, bridge and equity financing for Net Lease Properties and Large Anchored Centers has arranged financing for their 12th Walgreen Net Lease Property transaction.
Carlsbad, CA : April 24, 2007 — Marabella Commercial Finance, Inc. who specializes in arranging permanent, construction, bridge and equity financing for Net Lease Properties and Large Anchored Centers has arranged financing for their 12th Walgreen Net Lease Property transaction
With the huge wave of Baby Boomers reaching retirement age, the demand for pharmaceutical goods is expected to increase dramatically over the next 20 years. Walgreens, one of the market leaders in the retail pharmaceutical segment is developing stores at a rapid pace to meet this demand through their local area developers.
Many of the local area developers are then selling the properties to 1031 Exchange Buyers who are mostly between the age of 40 to 80 years old (Baby Boomers themselves). Many of the buyers of the Walgreen properties like the fact that in most cases the leases are triple net and their Landlord Obligations such as taxes, insurance and maintenance of the building are minimal. Although a buyer/borrower should always have their attorney review the lease terms to verify that the property they are considering is true triple net and does not require Landlord Obligations. This is attractive to active Baby Boomers who are selling high maintenance properties such as apartments that require a significant amount of property maintenance and attention on the part of the Landlord. Active Baby Boomers who are planning on retiring like the fact that they can purchase a Net Lease property which gives them a cash flow to meet their retirement needs and gives them the freedom and security that they desire in their retirement years. The properties also allow the buyers to meet their 1031 exchange requirement even though it acts like a bond in most cases but it is real estate. https://www.marabellafinance.com.
Many of these Baby Boomer Exchange Buyers are seeking leverage to gap the difference between what they are paying for Walgreen Properties and what they are putting in to the transaction as a down payment. Since Walgreen has a Shareholders Equity amount of approximately $10 Billion there is a variety of loan programs that are available to the Baby Boomers who are seeking the Walgreen 1031 Exchange properties.
For the Walgreen transaction that Marabella Commercial Finance most recently arranged permanent financing the buyer was seeking an 80% loan to value and the loan amount came to approximately $3,530,000. The buyer desired cash flow and requested a 10 year interest only loan and the rate was priced at 108 basis point spread over the 10 Year On-The-Run U.S. Treasury Yield. Early on in the transaction the rate was locked at approximately 5.77%. The contract had a very short due diligence period with no financing contingency, Marabella Commercial Finance with the assistance of the buyer / borrower worked seven days per week for the first two weeks of the transaction to insure that a commitment would be delivered within the buyers 29 day due diligence period since deposit monies were at risk. The transaction was closed in approximately 59 days from the time the borrower applied to the direct lender and sent in the Good Faith Deposit Monies to the direct lender. The buyer was very sensitive to loan closing costs due to a past transaction where the direct lender did not disclose costs associated with the loan for that transaction. To ease the borrower / buyers mind Marabella Commercial Finance gave the client three different loan quote alternatives with three different direct lenders and broke down all estimated costs for the transaction for each different loan structure / direct lender giving the client a complete understanding of
the total estimated cost for each loan before the client applied with any of the three direct lenders that were introduced to the client by Marabella Commercial Finance, Inc.
Marabella Commercial Finance specializes in arranging permanent, construction, bridge and equity financing for Net Lease Properties and Large Anchored Centers.
Christian S. Marabella, President
Marabella Commercial Finance, Inc.
Office: (760) 479-0800 | 24/7 Cell Phone: (760) 803-6464