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PACIFIC NORTHWEST NEWS
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Metro Commercial Realty Obtains $21 Mil in Financing on Two Portland Gym Properties

7/13/16

CBRE Capital Markets’ Debt & Structured Finance team has secured $21.2 mil in non-recourse financing for two prime located retail/gym properties; the 24 Hour Fitness in Portland’s burgeoning downtown Pearl District and the 24 Hour Fitness in Tualatin, a scenic and vibrant suburb of Portland.

The two assets have been occupied by 24 Hour Fitness for over 10 years and each has a healthy membership base. The 24 Hour Fitness “Sport” concept in the heart of Portland’s Pearl District is a state-of-the art facility offering its members a wide range of exercise options and amenities including spin, weights, basketball and an indoor swimming pool. The Tualatin property is 24 Hour Fitness’s “Super Sport” concept and offers all the traditional “Sport” concept amenities and more, including sauna & steam rooms, racquetball, TRX suspension equipment, a whirlpool and more.

CBRE’s Michael Walker arranged the financing on behalf of an entity owned and controlled by Metro Commercial Realty. The long term, fixed-rate financing offers prepayment flexibility and was funded through a West Coast bank. The loan has a term of 15 years and carries an interest rate of approximately 3.64%.

“These properties are strategically located in key Portland locations to best serve the impressive 24 Hour Fitness membership base. The long term leases Metro Commercial secured from its tenants, coupled with the growth of Portland’s economy made this opportunity very attractive to a wide swath of lenders. Ultimately we were successful securing extremely cheap capital on a 15 year basis while maintaining prepayment flexibility,” said Walker. “Typically, long term loans carry a higher cost of capital and lenders like to structure against early prepayment to protect their yield. However, through our process, we were able to secure long term debt in the mid 3% range and maintain prepayment flexibility through a step-down prepayment structure. We achieved all the sponsor’s objectives.”

Nicknamed “The Silicon Forest,” the Portland Metro area is home to notable tech companies including Intel, Airbnb, Puppet Labs, Smarsh, Jama Software and eBay. Portland is also a major hub for sportswear and apparel companies including Nike, Adidas and Columbia Sportswear.





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