Two Bay Area Self Storage Properties Secure $25.4MM in Construction Take-Out Loans

Gantry, Bay Area, San Jose, Hercules, SAF Keep, StoreLocal

(Editor’s Note: The SAF Keep facility is located at 1700 Junction Ct, San Jose, and is owned by an entity affiliated with Junction Court Ventures LP, according to property records. The StoreLocal is located at 1444 Willow Ave, Hercule, and is owned by an entity affiliated with the Claremont Companies, LLC.)

San Francisco, Calif. (January 25, 2022) – Gantry, the largest independent commercial mortgage banking firm in the U.S., has secured $25.4 million of permanent, construction take-out loans for a pair of new-build self-storage facilities in the Bay Area communities of San Jose and Hercules, Calif. Both properties were pre-stabilization at time of financing. The two separately owned, new construction properties include a 88,403-square-foot SAF Keep facility in San Jose, and a 98,323-square-foot StoreLocal facility in Hercules.

Gantry’s Tom Dao, Principal, and Erinn Cooke, Associate, with the firm’s San Francisco production office completed the financings on behalf of two borrowers, both private real estate investors. Each loan was placed with a different lender from Gantry’s roster of correspondent life companies. The fixed rate, permanent loans for the San Jose and Hercules facilities were for 10- and 25-year terms, respectively.

Notably, due to the firm’s seasoned lender relationships and strong underwriting, Gantry was able to secure permanent loan financing, which typically requires 90%-plus occupancy status, when San Jose was at 75% and Hercules at 30% occupancy, to stabilize the assets for final lease up.

According to Gantry’s Tom Dao, “For projects that started when construction loans were in the 3% range, it becomes a challenge when completion take-out financing is in the 6% range.  Developers who are focused during underwriting, conservative on debt load and realistic about rent projections plan for these exit scenarios. Gantry consulted with both these developers on their construction financing, providing input on exit strategy from the outset of development. We review various refinancing strategies with our clients at all points in the construction process to anticipate or reassess adjustments in market conditions in order to manage the project’s exit strategy. For both these projects, this approach allowed us to underwrite permanent debt even when the properties were not fully stabilized or seasoned.”

About Gantry

Gantry, a privately held company headquartered in San Francisco, is a full-service mortgage banking firm with an extensive lineup of correspondent lenders utilizing Gantry’s production, closing, and servicing capabilities. Established in 1991, Gantry is currently staffed by nearly 100 professionals in regional offices throughout the western United States and in New York with over 45 production teams that originated nearly $5 Billion in the last 12 months. The company’s national servicing platform of approximately $17 billion represents more than 2,100 loans located in 43 states. Gantry is rated as a Primary Servicer by Standard & Poor’s and is one of a select few non-banking/non-insurance-chartered companies with this designation. 

West Coast Commercial Real Estate News