BOSTON—In a creatively structured small balance deal, Valencia Realty Capital, a provider of flexible, cost-efficient debt capital for commercial real estate investors and borrowers, announced today that it has arranged $2 million in cash-out refinancing for a portfolio of 17 residential units in six buildings, located in five different towns.
“This small balance loan transaction had a lot of moving parts to it, which made it challenging for our borrower client. The loan closed while the portfolio was being repositioned, with newly renovated units in process of being leased up. We strategically positioned the loan request in the debt capital markets to drive optimal results,” said Stephen Smeke, Managing Director of Boston-based Valencia Realty Capital. “We were able to obtain the loan on competitive terms with an earn-out allowing for additional proceeds upon stabilization of the properties.”
The terms included a fixed-rate period for 10 years with interest-only payments in the first nine months, followed by a 30-year amortization.
“We also managed to arrange a flexible three-year pre-payment penalty non-applicable if the properties were sold,” said Smeke. “The loan was non-recourse at 65% loan-to-value.”
The 17-unit portfolio includes six buildings in Revere, Middleton, South End, East Boston and Everett in Massachusetts.