December 2, 2019 – Continental Partners, a commercial real estate investment banking firm, has successfully secured financing for the acquisition of a historic, architecturally significant mixed-use building in the Financial District of San Francisco, California. The bridge loan is sized to 70% of the total cost, including an interest reserve, funds for tenant improvements, and leasing commissions. The financing was arranged by Mitch Paskover, President at Continental Partners and Delaney Crawford, Associate at Continental Partners.
The five-story, 10,384 square-foot property was purchased by M31 Capital, a private equity real estate firm. The Sponsor plans to strategically renovate each floor upon vacancy and re-tenant a majority of the floors with companies that have preleased the space, according to Paskover.
“Continental Partners completed an extensive market survey to determine comparable rents and justify the projected value of the asset at stabilization,” explains Paskover. “By cultivating a deep understanding of the Sponsor’s business plans and communicating our findings accordingly, we were able to identify a lender that provided a bridge loan surpassing the initial amount requested, allowing the Sponsor to meet the goals of this investment while preserving more equity for additional projects.”
The asset consists of retail and ofﬁce space on the ground floor, along with four additional floors of office space and a storage basement. With current leases as much as 90% below market, the Sponsor will create significant value through improvements as these end, Crawford notes.
“We needed to source a lender who understood the long-term investment potential of renovated office space in the Financial District submarket, given the region’s booming technology industry, business activity, and employment growth,” says Crawford, who notes that the Bay Area’s unemployment rate registered at just 2.2% as of September.
Paskover adds: “By positioning the financing request correctly and demonstrating these strong fundamentals, our team was able to far exceed the Sponsor’s requirements, structure an interest reserve, and open the door for future opportunities.”
The loan is priced at 30-day LIBOR + 350 with no prepayment penalty and has a total consideration of $6.55 million. The subject property is located at 620 Commercial Street in San Francisco, California.
About Continental Partners