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12/18/18
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Continental Partners arranged $6.5 mil in financing for the purchase of a 34.1k sf, mixed-use building in the San Francisco Bay Area. The property, which was originally constructed in 1972, is located at 1290-1298 East 14th St, midway between I-580 and I-880 in the East Bay city of San Leandro.
The loan facilitated the acquisition of the four-story building as well as value-add renovations to the asset. The property has been fully leased to Wells Fargo, who will offer consumer-facing retail on the ground floor and establish corporate offices on the additional floors.
The non-recourse bridge loan was secured by Continental’s J.M. Grimaldi, on behalf of an Oakland-based syndicator.
“With its central downtown location in the growing East Bay submarket of San Leandro, in easy walking distance of the BART, this is an excellent investment property,” says Grimaldi. “That said, the sponsor was struggling to find a lender that could meet its financing requirements, due to the asset’s 28% occupancy rate and minimal in-place cash flow at the time.”
According to Grimaldi, San Leandro is increasingly attracting businesses seeking an alternative to sky-high office rents in San Francisco and Oakland, while offering easy commutes for employees living in those areas, further driving the property’s long-term investment potential.
The financing came in at 80% of the total project cost, or 75% of appraised stabilized value, according to Grimaldi. Ultimately, the borrower received the required funding and then leased the property to a high-credit tenant.
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