This
is the first transaction with a commercial mortgage-backed securities (CMBS)
lender that Wood and Patterson have completed since 2007.
"The
CMBS market was hot in 2006 and 2007 but cooled off for much of the
recession," Wood said. "Now that market is coming back. CMBS pricing
is more competitive and these lenders will take on more risk to win
business."
The
transaction presented a number of challenges, including the fact that it
required a 75 percent loan-to-value and a high loan per square foot. Kimball
Creek Village is also located in a secondary submarket and is not grocery
anchored, which limited interest from NBS’ traditional life insurance company
lender base. While the center was 91 percent occupied when the transaction
began, one tenant vacated during the process.
Wood
and Patterson were able overcome these hurdles and close the loan on a tight
timeline, allowing the borrower to avoid paying extra fees to extend the
construction loan, after several previous extensions.
