ValueXpress has arranged a $4,150,000 CMBS conduit loan for the refinance of a 55,200-square-foot office building located at 201 N. Front Street in Wilmington, North Carolina. The Murchison Building is an 11-story brick and marble structure at the corner of Front and Chestnut Streets. Sitting on historic waterfront property, the building overlooks the Cotton Exchange and Cape Fear Community College to the North, the USS North Carolina Battleship Memorial and Cape Fear to the West, Riverfront Park and Chandlers Wharf to the South and Wilmington Downtown including its Courthouse to the East. The historic structure was constructed in 1914.
The property, which was purchased in June 2014 for $1.5 million, was significantly underperforming at acquisition with occupancy at approximately 28%. The owners embarked on a value-added rehabilitation of the property to increase occupancy, cash flow and value. The owners spent approximately $450,000 in building and tenant improvements, increasing occupancy to 88% with leases to over 60 tenants.
Ownership scored a major coup by securing a ground-floor restaurant, Pour Taproom, for 6,500 square feet (12% of the space) under the terms of a ten-year lease. Pour Taproom, which has eight U.S. locations, was started in Asheville, N.C. in 2014 to support and showcase local craft beer. The concept is to offer a unique self-serve system that allows patrons to try a large variety and selection of beer, cider and wine and pay by the ounce.
As a result of the successful renovation and leasing effort, rental income has increased from approximately $550,000-$600,000 at acquisition to nearly $1 million of in-place rents at closing. The purpose of the refinance was to retire high-cost debt that was utilized for the acquisition and rehabilitation of the property, buy out one partner and provide capital reserves for future building improvements and tenant leasing.
“The transaction was completed through our Fixed-Fee CMBS program,” commented Michael D. Sneden, Executive Vice President of ValueXpress. “Usually, the transaction costs for third-party reports and lender legal charges are too expensive for small balance CMBS loans, but this program fixes those costs at $25,000, saving $10,000-$25,000 over typical CMBS loan programs.”
The Fixed-Fee CMBS program is available for all typical CMBS conduit loan assets in loan amounts of $1.5 million to $12 million. For a loan quote on a similar transaction, contact Michael Sneden (firstname.lastname@example.org) or Gary Unkel (email@example.com).