Colorado Real Estate Journal - February 17, 2016
When NetReit recently paid $25.33 million for the 121,399-square-foot Shea Center II office building in Highlands Ranch, it initially planned to put a lot of money down. “The borrower kind of changed course and put less cash into the deal,” said Doug Austin, a senior vice president/senior director of NorthMarq Capital’s San Diego regional office. Instead, NetReit decided to put less money down and get a bigger loan. Austin arranged acquisition financing of about $17.73 million for NetReit, a real estate investment trust. That is about a 70 percent loan-to-value ratio. “They found another property they wanted to buy, so they wanted to leverage this property more,” Austin explained. However, the 10-year loan, amortized over 30 years, he arranged for NetReit has attractive terms. “It has five years of interest only, which helps their cash flow,” he said. Austin arranged the loan with a commercial mortgage-backed securities lender. There was a lot of interest from lenders, he said. “It’s just a great property in a great area,” he said. “They liked the growth in the area and the continued growth that is expected,” he added. Anchor tenants at Shea Center II include Halliburton Energy Services and Shea Homes. “The challenge to lenders is that Halliburton takes up quite a bit of space and so they had to come up with a business plan in case they leave and the space needs to be filled,” Austin said. However, given the demand for office space in the area, it likely could be leased quickly, he said. Also, he said Halliburton’s lease runs until the end of 2022, so it not about to expire. The lease for Shea Homes, however, comes up at the end of this year, he said. “Shea Properties (a sister company to Shea Homes) built the building and every indication is that Shea Homes plans to stay,” Austin said. NetReit also is bullish on Colorado and the Denver area, he said. “They own quite a few properties in Colorado,” Austin said. According to its website, NetReit’s other Colorado holdings include: • The 84,145-sf Union Terrance office building in Lakewood; • The 44,042-sf Union Town Center retail center in Colorado Springs; • The 5,983-sf Regatta Square retail center in Denver; • The 80,600-sf Presidio office building in Colorado Springs; and • The Rangewood medical office building in Colorado Springs. Other News Greg Benjamin, senior vice president, and Jeff DeHarty, associate producer, in the Denver office of NorthMarq Capital arranged supplemental financing of $7 million for the 252-unit Heights on Huron apartment community at 10648 Huron St. in Northglenn. The community was constructed in 1969 and has 21 buildings. The borrower is a veteran commercial real estate developer and investor. NorthMarq has arranged a number of loans on behalf of the developer. Mark Jeffries, vice president, and Conor McCahill, investment analyst, in the Denver office of NorthMarq Capital arranged a $3.7 million refinancing for a retail center at 3636 and 3700 S. College Ave. in Fort Collins. The two buildings have a total of 35,211 square feet. Men’s Wearhouse is the largest tenant and the others are a mix of local and regional operations. Dale Stewart, vice president, and Mark Lindgren, investment analyst, for the Denver office of NorthMarq Capital arranged permanent financing of $1.86 million for Crossroads Self-Storage at 4270 Highland Meadows Parkway in Windsor. The loan is a 10-year term with 25-year amortization and 65 percent loan to value. Constructed in 2013, the facility consists of 236 self-storage units in seven buildings. There are also 49 recreational vehicle spaces available. John Richert and Chris Bourgeois of Terrix Financial recently arranged a $1.8 million refinancing for a two-story, two-building apartment community in Aurora. The complex was built in 1961. The rate for the new loan is fixed for five years and is amortized over 30 years. Terrix arranged the loan with a local bank. John Richert and Jay Richert of Terrix Financial arranged a $1.18 million loan to refinance a seven-unit apartment building in Boulder. The 8,041-sf building was constructed in 1958 and 1971. The rate on the 10-year loan is fixed for five years and amortized over 30 years. There is a 1 percent prepayment penalty for the life of the loan. Terrix placed the loan with a regional bank. John Richert and Jay Richert of Terrix Financial arranged a $1.14 million acquisition loan for a 28-unit apartment community in Colorado Springs. The complex was built in 1964. The 10-year loan is amortized over 30 years. The lender was a bank represented by Terrix.