(EDITOR’S NOTE: According to sources with knowledge of the transaction details, the loan was for $5.6 million. The address of the subject property is 131 Franklin St., in San Francisco.)
SAN FRANCISCO, Calif., (October 4, 2018) – Continental Partners recently secured financing for a centrally-located, mixed-use trophy building in the Hayes Valley submarket of San Francisco, California. The non-recourse bridge loan was secured by Continental Partners Executive Vice President J.M. Grimaldi and Associate Carl Riggins.
The 9,580 square-foot freestanding office and retail property also presents an opportunity for vertical development and additional uses, notes Grimaldi.
“Despite the strong fundamentals and potential of the asset, the borrower, an owner-user who recently retired, was facing a maturity default after a sale to a foreign investor fell through due to factors outside either party’s control,” explains Grimaldi. “A major obstacle to securing competitive financing within the required tight timeline was that the asset was vacant, and thus had no in-place cashflow.”
The borrower, who acquired the building nearly 10 years ago, previously occupied a portion of the asset with her financial services business, as well as leased out the additional space at the property and offered short-term office and event space rentals, according to Riggins.
“Continental Partners was tasked with identifying a lender who understood the situation and was comfortable with the borrower’s business plan to re-tenant the building and potentially secure an SBA loan before pursuing a sale,” continues Riggins. “We strategically approached more than a dozen hard money lenders and demonstrated the strong appeal of the asset to investors, tenants, and owner-users, due to its exceptionally-located urban core positioning in a revitalized San Francisco neighborhood, recent renovations, and development potential. Further, we facilitated a quick close by finding a lender who was willing to accept an appraisal performed for a different lender, at a rate more than 2 percent lower.”
According to Riggins, the building currently has a height of 40 feet and is zoned for possible development, including residential, up to 85 feet, further driving its long-term investment potential.
The total consideration of the one-year loan, priced at a rate of 9.75 percent with a loan-to-value of 60 percent, is $5.6 million.
The subject property, which was originally constructed in 1909, is located at 131 Franklin Street in San Francisco, California.
About Continental Partners
Continental Partners is a leading national mortgage banking firm based in Los Angeles that provides Market-Smart capital and financial services to real estate owners and developers nationwide. Since its inception, Continental Partners has arranged mortgage loans ranging from $2 million to $200 million for multifamily, office, retail, industrial, hotels, mixed-use and self-storage properties.
With its deep expertise in sourcing competitive debt, mezzanine, and joint venture equity, Continental Partners has established long-standing relationships with both lenders and clients, and continues to deliver sound financing solutions to maximize the value of real estate holdings. The firm offers all major loan types, including fixed rate, floating rate, mezzanine, bridge and construction.