NBS Financial Services’ Mike Wood, Principal, Director of Seattle Production has arranged $39 million
in acquisition financing for a 210,321 sf FedEx industrial property in Redmond,
Washington.
State Farm
Life Insurance, located in Bloomington, Illinois, is the lender. The
transaction proved to be challenging in regards to the fact that it was a
single non-investment grade tenant requiring a high loan per square foot at
approximately $185. This is a sharp contrast to the typical $100-150 valuation
for industrial product, Wood said. In addition to these challenges, FedEx
Corporation didn’t guarantee the lease as the tenant is only a subsidiary.
Despite these
challenges, Wood was able to structure the loan with a 20-year term and 20-year
amortization and the borrower locked in a sub 4 percent interest rate.
“The borrower
requested a long-term fully amortizing loan in order to lock-in a low interest
rate and avoid refinancing,” Wood said. “If the buyer sought the same deal in
the current market, the rate today would be an estimated 100 basis points
higher.”
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