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.