Class A Industrial Recapitalization, Surprise, AZ
- Capital Source: Credit Union
- Purpose of Loan: Recapitalization
- Loan Amount: $9,600,000
- LTV: 50%
- Rate: 4.00%
- Term: 10 Years
- Amortization: 25 Years
- Prepayment: Open
- Recourse: Non-Recourse
- 170,000 SF
Tower recently arranged $9.6 million in non-recourse, long-term, fixed rate debt on behalf of an international, solar glass manufacturer. Headquartered in Brussels, the company acquired the land in 2011 and built a state of the art, 170,000 square foot, glass manufacturing facility that also serves as the company’s US headquarters. Both the acquisition and development of the project were paid for with cash, costing about $15 million to complete.
The project features 28-foot ceilings, 2 stage fire sprinkler system, 12 megawatts of power, evap cooled warehouse, 125 paved parking spaces, 13 overhead doors, rear paved truck storage area, BNSF rail access, and 17,000+ square feet of class A office space.
A few years after completion of the property, the US federal government’s solar tax credit program ended, causing the borrower’s US projects to dry up, while at the same time becoming more active in other parts of the world, including the Middle East and Africa. Under these new circumstances, Tower’s client vacated the building and leased it to a growing national RV sales company. With a new 10-year, single tenant, NNN lease in place, Tower was able to find a lender to provide the borrower with a $9.6 million recapitalization loan where the funds can be re-allocated to support different solar projects throughout the world.
The $9.6 million loan represented 50% loan-to-value and offered a 4% fixed interest rate for the first 5 years of the loan term, based on a 25-year amortization schedule. The interest rate resets for years 6-10 of the remaining term.
This assignment was especially challenging because the building was completely vacant when we first went out to market for financing. At the time, we were unable to find a conventional lender that would offer terms on a vacant industrial property in a smaller market, coupled with a company based overseas that was unable to provide any warm body or corporate guarantees for the loan. Once a long-term lease was in place, Tower was able to demonstrate that although the tenant was not a “credit tenant,” they were established, growing, and was in a strong financial position. Tower was then able to find a conventional lender who could become comfortable with the ownership structure on a non-recourse level at lower leverage, and worked closely with the appraiser to support the highest value for the project possible.
About Tower Capital:
Tower Capital was founded to enable owners of commercial real estate to achieve their investment goals with the least amount of time, energy, and cost, while creating surety of execution and peace of mind.
Established in 2015 and headquartered in Phoenix, Arizona, Tower Capital provides customized structured financing to investors throughout the United States. We specialize in debt and equity placement ranging from $2 Million to $300 Million and have financed over $1.2 Billion for our clients since inception. We focus on independent financial advising with an entrepreneurial mindset, market vigilance and personalized attention to every client.