“The repeat borrowers of KDH were looking to return costs to the partner,” Larry Peters said. “This non-recourse debt gave them back the cash they were looking for. The interest rate was locked at loan application, which proved to be key in saving the borrowers 25 basis points in the interest rate during an increasing interest rate environment.”
“The borrower plans a major addition to the asset and the beauty of this loan is that the lender required no escrow, no future approval, and funded the entire loan without a holdback,” Larry Peters said.
Emily Zarcaro, Vice President at Q10 KDH, arranged $26.1 million in non-recourse financing with Silverpeak Argentic for a portfolio of single-tenant office buildings located across Texas. Emily worked on behalf of the borrower to secure a 10-year, fixed-rate loan with 5 years of interest only payments.
“This loan was interesting because of so many unique components and moving parts,” Emily said. “Our borrower sponsor is a foreign national with extensive experience overseas in commercial real estate. In conjunction with a local partner, our borrower team is building an investment portfolio in the U.S. We were happy to secure debt that financed the acquisition of several State of Texas-occupied buildings while simultaneously refinancing three other properties that were previously owned in cash. Silverpeak Argentic closed in a timely manner, and I look forward to working with both sides of this transaction again.”
Q10 KDH Vice President Ryan Watson provided financing with a small-balance Freddie Mac loan for a multifamily property located in Houston, TX. The transaction closed with a 7-year term and a 4.68% interest rate. The Sponsor purchased a property less than two years ago, and through a planned rehab project and better property management, was able to increase the value of the property. Ryan Watson was able to pull equity from the project and provide non-recourse financing with flexible pre-payment options.
Q10 KDH Vice President Emily Zarcaro provided refinancing in the amount of $7,500,000 with Silverpeak Argentic for a Class A office building located in The Woodlands, TX. The transaction closed with a 10-year term, 30-year amortization, and a 4.92% interest rate.
Emily Zarcaro stated, “Our borrower was seeking to refinance a maturing life company loan as well as pull over $3,500,000 out of the property in order to pursue other investments. Additionally, the property is currently 82% occupied due to vacant space being held for a potential expansion by the anchor tenant. We were able to achieve the cash out request through CMBS execution with minimal reserves and limited cash management provisions. Without previous CMBS borrowing experience, leasing and cash flow restrictions were among the clients’ biggest concerns. Silverpeak Argentic did an outstanding job of making the structure look like a life company loan as much as possible.”
Q10 KDH Vice President Larry Peters and Senior Associate Adam Unger provided a cash-out refinance for a multifamily property in a secondary market of Texas. The borrower was looking to continue to hold their asset for at least 15 years and they received a 15-year term, full interest only and returned cash to the partners.
Larry Peters stated, “The borrower received an approximate discount of 33 basis points in their interest rate for agreeing to implement water saving devices. That will save $1 million in interest over the life of the loan. Coupled with the interest only component over 15 years and the water saving cost, the borrower reduced their loan payment while putting $3 million in their pocket and still own the asset.”
HOUSTON — Q10 Kinghorn, Driver, Hough & Co. (Q10 KDH) has arranged two refinancings totaling $44.5 million in the Houston area. In the first transaction, Larry Peters of Q10 KDH arranged $29 million for two undisclosed multifamily assets totaling 642 units. These deals included a 15-year interest-only loan for the first property and a floating-rate loan for the second property. In the second transaction, Buddy Hopson of Q10 KDH placed a $15.5 million loan through a regional bank for the refinancing of Ravenswood Village Shopping Center, a 121,694-square-foot retail center in Huntsville. Additional terms of the transactions were not disclosed.
Q10 KDH Vice President Dave Holland arranged a cash-out refinance with a correspondent life insurance company lender for a self-storage property in Houston, TX. The non-recourse loan provided 70% loan to value and had a 15-year term. Dave Holland stated, “The borrower had almost paid off a fully amortizing 15-year note and wanted to recapitalize so he could buy out a partner. This non-recourse small loan program was a perfect fit for this long term owner since he was able to lock the interest rate for 15 years near 5%.
Q10 KDH Vice President Larry Peters and Senior Associate Adam Unger provided a cash-out refinance with a correspondent bank for a 100,000+ sq ft big box retail center. The loan closed with a fixed interest rate.
This repeat Q10 KDH borrower was looking to reduce their personal recourse and return capital to their partners. They also requested flexible prepayment and needed to close by a certain date. Larry Peters stated, “We are fortunate to have a great relationship with this borrower. Familiarity with their legal team and management company made meeting our short closing time possible. Without the first hand knowledge of the borrower and lender, this deal could not have closed in time.”
Q10 KDH Principal Gary Hough and Vice President Matt Franke provided permanent fixed-rate financing with our correspondent lender for a multifamily property located in the Greater Houston Area. The transaction closed with a 10-year term and a 4.04% interest rate for a loan amount of $10,750,000. This property was a refinance of a property KDH financed 10 years ago with another correspondent insurance company.
After taking this loan request to the market, our correspondent lender ultimately offered the best overall terms that most closely aligned with the borrower’s objectives. The loan process was very smooth and resulted in a closing only 33 days from application execution.
The refinance resulted in a 200-basis point reduction in the coupon rate while providing the sponsor with a very significant “cash-out”. KDH has enjoyed a relationship with this borrower for over 20 years.