Transactions

Permanent Loan Financing
32270 Telegraph Road

Milestone Realty Services worked in a mortgage brokerage capacity to procure $6.1 million in permanent loan financing on 32270 Telegraph, a 58,000 square foot Class A medical office building in Bingham Farms, Michigan.

Property

32270 Telegraph is a two story multi-tenant office building which is 100% occupied by a law firm and two medical office tenants. The lease with the law firm had just been signed and the other tenants were renewing for longer term leases. The current mortgage in place was coming due in three years, and given that the current lending markets were favorable and the current mortgage did not have a prepayment penalty, it was an ideal time to refinance the mortgage.

Owner Objectives
Milestone met with the owner to understand the history of the project and identify the owner's objectives in the financing. The owner had maintained a high occupancy at the building and a stabilized net operating income. The current mortgage was at above- market interest rates with a shorter amortization period, resulting in larger debt service payments, lower cash returns and higher taxable income to the investors.

The owner had been discussing financing terms with local banks, but was being quoted lower loan-to-value amounts and shorter amortization periods than was available through other lending sources. Milestone prepared analyses for the owner, highlighting the benefits and higher returns to be achieved by a higher loan amount and longer amortization. Given the stabilized history of the project and premier location, the property was an excellent candidate for these financing markets.

Solicitation
After outlining the parameters of the financing need, Milestone prepared a Request for Financing Proposal that detailed the property, its operating history, tenant lease information and proforma projections that highlighted the key informational elements of the property, while presenting it in the most favorable and complete manner. Requests for Financing Proposals were sent to more than 50 prospective conduit, life company and bank lenders.

Negotiation
Milestone received and analyzed several proposals and met with these lenders to conduct site tours and discuss the property's operations. After a thorough review and negotiations, lenders were asked to submit final financing scenarios.

Closing
While many mortgage brokers' services stop with a signed commitment letter, Milestone continued to assist the owner in closing the loan. Milestone assisted the owner in negotiating the commitment letter, coordinating the due diligence and reviewing loan documents, all to ensure a timely closing.