ValueXpress obtained a $6,650,000 first-mortgage CMBS conduit loan that was utilized to refinance an 82,280-square-foot single-tenant, industrial flex building located in St. Louis, Missouri. The building is 100% occupied and leased to Nooter Construction Company. The transaction refinanced a maturing CMBS conduit loan.
The Sponsor approached ValueXpress seeking a solution to the difficult challenge of refinancing a single-tenant asset with only five years remaining on its lease. “The Sponsor had contemplated entering into negotiation with their tenant to extend the lease early at a reduced rent,” commented Dennis Suh, Senior Vice President at ValueXpress. “However, having successfully refinanced other single-tenant assets with similar hurdles I advised against it, ultimately providing a refinance proposal that did not require a lease extension.”
“We have had excellent success working with Sponsors to refinance single-tenant asset deals with lease terms that expire early in the loan term,” commented Michael D. Sneden, Executive Vice President of ValueXpress. “The effort requires substantial diligence on how “mission critical” the location is to the tenant and providing a compelling case to the chief credit officer that the tenant will not move at lease expiration.”
“This is the second high-quality industrial asset that I have closed in recent months,” commented Suh. “In each case I was able to confirm that the tenant was credit-worthy despite a lack of corporate financial statements and that the location was critical to business operations.”
The loan transaction was structured as a 10-year term based on a 25-year amortization schedule. Loan-to-value was 65% and the property provides 1.70x net cash flow DSCR on actual income and expenses.