Services

Permanent Loan Financing
Northpointe Pediatrics Medical Offices

Milestone Realty Services, Inc. worked in a mortgage brokerage capacity to secure $1.7 million in permanent loan financing for the acquisition of the condominium interests in the Northpointe Pediatrics medical/general office building located at 30061 Schoenherr Road in Warren, Michigan.

Property
Constructed in 1998, the 13,500 square foot Class A medical/general office building is located in a strong medical office market in southern Macomb County. A single story building with brick exterior, the building sits on 1.56 acres with 200 feet of frontage on Schoenherr Road. The building had been 45% leased by Northpointe Pediatrics, a highly successful medical practice established in 1992. Northpointe Pediatrics is expanding to occupy 75% of the building. A computer software company occupies the remaining 25% of the building.

Owner Objectives
Milestone was approached by the Owner to procure long-term first mortgage financing to be secured by the property to retire the existing note on Condominium Unit 1, acquire Condominium Units 2 and 3, and pay closing and improvement costs. Milestone was retained because of their experience in securing financing on local medical and general offices as well as their contacts within the national and regional lending communities.

Solicitation
The Owner first approached local banks with which they had relationships. Initial quotes from these banks ranged from up to $1.5 million at rates near 6.5% for five years. Milestone quickly ascertained the positive aspects of the project, reviewed financial documents and market studies, and as a result of its experience in the metropolitan Detroit market, prepared a Request for Financing Proposal. The offering package on the property detailed the location, facilities, the financial viability of the current tenants, operating projections, and acquisition and occupation summaries. In addition, Milestone compiled, reviewed and included area and market demographics and statistics.

Milestone utilized its contacts, national and institutional lenders and approached fifteen different lenders who were deemed appropriate for this lending scenario to identify the ultimate first mortgage lender. Milestone’s knowledge of lenders active in this transaction/acquisition type and in medical and general office properties, as well as knowledge of lending sources’ territorial limitations and project type preferences was important to this process as it significantly streamlined the initial phases of lender solicitation.

Milestone personnel have consistently been successful in acquiring permanent mortgage funding for this property type. Milestone’s overall understanding of the project and its knowledge of the metropolitan Detroit market were also valuable assets in the successful completion of this loan.

Negotiation
In total, Milestone reviewed loan quotes from eight different sources including local banks, life companies and conduit lenders. Milestone received quotes ranging from $1.7 million to $1.8 million for a 10 year term at rates ranging from 5.75% - 7.0%. Milestone analyzed the financing proposals, met with lenders to discuss tenant operations and review financial documentation, conducted site tours, and assisted in the flow of information. After a final review of the financing scenarios, American Equity Investment Life Insurance was selected as the preferred lender.

Closing
While many mortgage brokers’ services stop with a signed commitment letter, Milestone continued to work with the owner and the lender through the coordination and review of loan documents, and as a result, the $1.7 million, 10-year loan at 5.75% interest was arranged and closed in less than 90 days.