Colorado Real Estate Journal - September 2, 2015
Denver-based Terrix Financial closed 31 loans in the second quarter, for a total of $79.38 million. The loans included a wide range of property types, including office and office/warehouses, self-storage facilities, retail centers, a manufactured housing park and a number of apartment communities. The transactions included refinances and acquisitions for Colorado and out-of-state properties. Many of the loans were placed with Terrix’s correspondent lenders. “I think we are probably in line to have another good year, close to a record year,” said Kevin Chadwick, a principal of Terrix. Existing owners want to take advantage of still-low interest rates by refinancing and investor appetite for all asset classes in the Denver area has not waned, he said. “We are not seeing any sign of it slowing down,” Chadwick said. “There is a tremendous amount of capital chasing very few properties,” he said. Even if the Fed raises interest rates, he doesn’t think that will materially slow activity in the Denver area. “It might mean cap rates will go up a bit, but there is so much money out there, I don’t think a slight uptick in interest rates will make much of a difference,” Chadwick said. Chadwick recently closed a $16.13 million acquisition loan for four out-of-state properties. “That was for an investor who did a deal in Denver and now I follow him around the country,” Chadwick said. Despite his relationship with the investor, it was a tough, complicated transaction. A lender represented by Terrix won the deal in a competitive bid process by providing the best terms and ability to do a reverse 1031 exchange, as well as closing in five weeks. A reverse replacement property must be purchased before the old property is sold. “That may be the first reverse 1031 I have ever done,” Chadwick said. “The whole thing was closed in less than five weeks, which was pretty remarkable,” he said. In another office transaction, Chris Bourgeois and Amy Gibson closed a $1.3 million refinance loan for an owner-occupied office in Thornton. The interest rate was fixed for seven years and was funded by a regional bank. In another office deal, John Richert closed a $2.28 million loan funded by a life insurance company for a Lakewood property of six buildings on 3.43 acres with 72 tenants. The office complex was constructed in 1975 and renovated in 1994. The loan has a five-year fixed interest rate and was amortized over 22 years. Terrix also closed $24.73 million in loans for 13 retail properties. Of that, Brandon Rogers closed $8.13 million in loans for four retail properties. He also worked with Jay Richert to close a $3.5 million acquisition loan for a Parker center, which was 91 percent occupied with nine tenants. The interest rate was fixed for seven years with a 25-year amortization, and limited recourse to the borrower. The loan closed in 40 days to meet a deadline. Rogers and Gibson closed two retail loans for a total of $3.3 million. One of the properties was in Las Vegas and was 100 percent occupied by seven tenants. The loan has a 10-year term with a 25-year amortization and no prepayment penalty. The lender was a regional bank and the borrower was a local Colorado investor. Craig Branton closed $5.56 million for two retail properties in Englewood. Marsha Blair assisted him with a $3.61 million refinance loan for a retail center located out of state. Constructed in 2002, it contained 32,400 net rentable sf. Branton and Jay Richert also closed two retail property loans. Both were funded by a correspondent life insurance company represented by Terrix and had a 15-year term and 25-year amortization. One was for a restaurant. The borrower is an experienced real estate investor and current Terrix client. The investor spent $200,000 on renovating the kitchen in the restaurant and the parking lot had been upgraded, making the property more attractive to lenders. John Richert also closed $2.39 million in loans for retail properties throughout Colorado. Assisted by Jay Richert, he closed an acquisition loan for a 5,199-sf Colorado Springs retail property constructed in 1999. Correspondent life insurance companies funded the loan. The same lender financed a $5.3 million loan for a 27,537- sf Boulder shopping center, in a deal closed by O’Brien and Gibson. The loan had a 15-year term and a 28-year amortization. The two-building center included a second-story office space. This center is 100 percent occupied by six tenants. Another correspondent life insurance company funded a $1.35 million refinance loan for another Boulder retail center. Bourgeois and Blair closed the loan, with an interest rate fixed for 10 years and a 20-year term and 25-year amortization. A total of $4.6 million in loans were processed for three office/warehouses. John Richert closed $3.15 million in loans for properties in Boulder and Longmont. The interest rate was fixed for five years with a rate adjustment every five years. The borrower was a limited liability company. O’Brien closed a refinance loan for a 32,000-sf, two-story office/warehouse on just under five acres in Commerce City. The tenant was on a short-term lease, which made the refinance more complicated. Terrix closed a total of $8.1 million in loans for two self-storage facilities in Denver and Fort Collins. John Richert and Blair closed a $5.5 million refinance loan for a borrower who needed to pay off existing debt and recapture some equity. The loan terms were interest only for 10 years with funding from a commercial mortgage-backed securities lender. Over half of the units are indoor and climate controlled. Other amenities included three elevators, coded keypad entry, on-site managers and forced air for two- and three-story buildings. Chadwick closed a $2.6 million loan for a self-storage property with 446 units in 12 buildings that was just under 100 percent occupied. The lender was a correspondent life insurance company that won this deal in a competitive bid process based on the ability to lock the rate at application and had the best rate for a 20-year fixed-rate loan. Terrix also closed $10.7 million in loans for apartment properties. Of those, Chadwick closed a $4.76 million apartment loan with a three-year term. Branton and Blair closed a $4.48 million acquisition loan for a 240-space parking facility located out of state. The loan terms were interest only for the first year with a three-year term and 25-year amortization. The borrower was a limited liability company and the lender was a bridge lender. Finally, John and Jay Richert closed a loan for a manufactured housing community in Colorado Springs. That loan has a fixed interest rate for the first five years and is amortized over 25 years. A correspondent life insurance company funded the loan.