Company Newsletter : January, 2012
Marabella Commercial Finance, Inc. Funds Walgreens and Jack In The Box in the 4th Quarter of 2011 and is Hopeful to Close Another Walgreens in 1st Quarter of 2012 That Has Received a Conditional Commitment Letter.
For the Walgreens permanent loan the Borrower / Buyer was a repeat Client of Marabella Commercial Finance, Inc. . Marabella arranged financing for the clients Walgreen property in 2009 at the height of the capital market credit crisis when financing was hard to find. Through Marabella’s efforts and assistance on the 2009 loan the client was able to sell the Walgreen property at a significant profit in September of 2011. Due to the sale, the client was then thrown into a 1031 exchange and elected to purchase another Walgreens corporate leased property for their upleg acquisition. The Borrower was very pleased with the low fixed rate, and attractive financing terms as well as the smooth and efficient processing that was yielded to the client for the 2009 loan, and requested several quotes for the new Walgreen targeted property. Marabella worked with the Buyer / Borrower for about a month, quoting and reviewing several different potential Walgreen acquisition targets before the actual store was identified at the end of the clients 45th ID period. One loan characteristic that was important to the Buyer / Borrower was having a friendly prepayment penalty at the lowest rate possible with surety of execution. The client wanted the flexibility to either payoff the loan or sell the property in the next 5 years without restriction, at a low cost and in an easy manner without hassle. Marabella worked with a portfolio / Bank Direct Lender who had a relationship and who had financed several other Walgreen corporate leased properties earlier in 2011. Marabella structured a 5 year fixed rate loan at 4.50% with a 25 year amortization. The loan amount for this transaction came to $3,150,000 which equated to a Loan-To-Value of approximately 51%. The prepayment was a very friendly $2,500 for the life of the loan. Marabella constantly communicated with the Borrower and the Direct Lender regarding any questions, concerns or follow up correspondence that was required by the Buyer / Borrower or Direct Lender. The Buyer / Borrower was very pleased with the loan process and the loan terms that were arranged on their behalf and have indicated to Marabella Commercial Finance, Inc. that they will utilize Marabella for all of their future debt and equity placement for themselves and their clients
For the Jack In The Box property acquisition loan Non-Recourse was a very important characteristic to the Buyers / Borrowers. Marabella met with the clients at their office near Los Angeles, CA to find out their specific loan requirements and how Marabella could help in the loan process. Since the loan was Non-Recourse and the Jack In The Box location was operated by a Franchisee Operator the Direct Lender required significant due diligence of the restaurant location (sales of specific store), credit quality of franchisee tenant and credit quality of Borrower / Buyer was very important to the Direct Lender approving the loan. Marabella arranged a loan of $745,000 with a 25 year amortization and all due in 10 years. The rate for this transaction was locked for five years at approximately rate of 5.25% and will reset after the 5 year fixed rate period at 3.000% over the 5 year CMT. The prepayment penalty is a very friendly 5-4-3-2-1%. Marabella Commercial Finance, Inc. has worked with this Portfolio / Bank Direct Lender for the past 14 years and has arranged permanent financing for several 7-Eleven’s, Jack In The Box’s, AutoZone, Burger King, and KinderCare properties with this Direct Lender during this period. Due to the credit crises this Direct Lender stopped actively lending on commercial Net Leased properties from around 2009 to the end of 2010. In the summer of 2011 we met with the capital source and they gave us marching orders to find them Net Lease properties that met their underwriting criteria for debt placement. We will continue to strive to have an excellent relationship with this debt source to offer our clients the most attractive loan terms and interest rate pricing possible for Net Lease commercial properties. This bank has indicated we should continue to source Jack In The Box, 7-Eleven’s, AutoZone, Burger King and other Net Lease transactions for debt placement. They have indicated they have $100 Million to deploy for these types of transactions.
Marabella Commercial Finance, Inc. is hoping to fund a $2,800,000 Walgreens refinance loan in the 1st Quarter of 2012. For this transaction, the remaining lease term of the Walgreen was less than 10 years, so Marabella had to assist the Direct Lender to derive comparables, to determine if the current rent would support the new loan amount and amortization. A Go-Dark-Value was derived by the appraiser which supported the loan amount of $2,800,000 and the 25 year amortization that the Borrower was seeking on the refinance. Marabella arranged a 10 year fixed rate loan at approximately 6.125%. This loan is Non-Recourse with Standard Bad Boy Carve-Outs and the rate has been locked. Marabella worked with the Direct Lender and the Buyer on several occasions at the Direct Lenders office to go over the Liability and Property Insurance, Go-Dark-Value, and to help formulate a win / win between the Borrower and Direct Lender on the interest rate and loan terms. If the loan is to close, it should fund at the end of January 2012.
Marabella Attending Mortgage Bankers Commercial Real Estate Convention in Atlanta Georgia in First Week of February 2012!!
Marabella will be meeting with their capital sources to continue to build on existing relationships and form new relationships for new sources of capital for their clients who require permanent , construction and equity financing for Walgreen, CVS, Kohl’s, Home Depot, 7-Eleven, Jack In The Box, AutoZone, O’Rileys and other Net Lease transactions. The Capital Markets are continually evolving due to the European debt crises, political and regulatory requirements so Marabella is continually investing time and money into research and development to form new capital market relationships and to discover new sources of debt for our clients. Our advantage is that we are constantly adapting to the ever changing capital markets. CMBS was hot in 2010 but then the Banks and Life Companies was where a Borrower could get the most attractive rate and terms in 2011 for Net Lease Property debt. We may be dealing with completely different Direct Lenders six months from now and Capital Sources are going in and out of the market, and pricing is constantly changing. Many of our clients tell us that some of the Direct Lenders they have dealt with in the past are either out of business, or out of the market and they really do not have a lending source to consider when they need to get a permanent loan on an acquisition, refinance an existing loan or take out a construction loan that is coming due. That is why Marabella Commercial Finance is constantly researching new sources of capital similar to a tech company researching and developing new tech products to come to market. If you have a Walgreens, CVS or other large Net Lease property that requires debt and / or equity placement contact Marabella Commercial Finance before the convention to take advantage of this opportunity. Normally our lending sources will bend over backwards to make a deal at the convention and they become much more aggressive on rate and
terms at the convention since they need to deploy capital to meet their goals for the new year. The convention will take place the first week in February 2012 so if you need debt placement for an acquisition, refinance or cash-out loan contact us between now and the first part of Feb 2012 and we will make sure to get your transaction in front of our Direct Lending sources at the convention. You can email your transaction to us at [email protected] or call us at (760) 479-0800.
We currently are offering our Borrowers who are seeking financing for newly developed Walgreens properties and other credit tenants with similar credit quality, a 5 / 7 or 10 year fixed rate loan with a 25 to 30 year amortization at an estimated rate of 4.30% to 5.625% (subject to change and availability without notice). Non-Recourse is subject to review of the transaction. This is a portfolio lending source and is not a conduit loan. There is no prepayment penalty for this loan. This lender has additional room for newly developed Walgreens and other appropriate credits. These terms will not last long so contact Christian S. Marabella at Marabella Commercial Finance today to take advantage of this loan at (760) 479-0800 or email us at nnn at marabellafinance dot com.
Our CMBS Lenders are tipping their toe back in the water. Our CMBS lenders are seeking to lend on Walgreen, CVS and other investment grade credit tenants with attractive loan terms and rate. Through our CMBS lending universe we are seeing a 10 year fixed rate loan with a 30 year amortization price out at 5.00% to 5.50% for a 30 year amortization and a 10 year fixed rate term. Loan to value maximums are still in the 65% to 75% range with a minimum debt service coverage ratio of 120% to 130%. Debt yield minimums are in the 9% to 10% range.
Life Company Financing
Through our Life Company relationships we are offering a 10/15/20/25 year fixed rate loans with 20/25 and 30 year amortization. Current rate range for Life Company pricing is 4.50% to 5.625% and rate is a function of fixed rate term. Non-Recourse is available but is negotiable.
Our Credit Tenant Lending sources offer high leverage financing for Walgreen, CVS and other Investment Grade Credit Tenants. Currently we are offering a 25 year fully amortizing loan for newly developed Walgreen, CVS or equivalent credit tenant. Current rate range is 5.00% to 5.50% for CTL financing. Minimum DCR / LTV depends on lease type (i.e. Bond Type, NNN, NN, Etc..).
If you require financing for a Walgreens, CVS or other Net Lease Property contact Christian S. Marabella at (760) 479-0800 or email us at nnn at marabellafinance dot com. We can also meet you and your clients at our satellite offices in downtown San Diego, Costa Mesa or Beverly Hills, CA. If you or your clients are out of state we can arrange a video conference in various offices throughout the United States.
Christian S. Marabella
Phone: (760) 479-0800
24/7 Cell: (760) 803-6464