Terrace Capital, Inc. - Non-Recourse Senior Debt Financing- $61MM - Barnett Capital Industrial Portfolio - Midwest, US.
New York, New York - December 5, 2012 - (www.terracecapital.com) Terrace Capital announced today that it has secured $61MM in non-recourse financing for a portfolio of single tenant, industrial properties located in nine states.
December 6, 2012 (Newswire.com) - Barnett Capital LTD, (www.barnettcapital.com) based in Chicago, IL is a "Family Office", founded by Joel Barnett, which provides high yield debt for owners of commercial & residential real estate and companies in need of financing for inventory and equipment. Mr. Barnett, for the past 30 years, has captained the firm that bears his name with the sole purpose of sourcing and managing investment opportunities for his family.
The proceeds of this $61MM, 75% LTV, CMBS loan were used by the borrower for the refinance of full recourse lines of credit that had been used to acquire, renovate and re-tenant 20 industrial properties, which comprised 2MM square feet. The senior debt had a 10-year fixed term and a 25 year amortization schedule and required no personal guarantees. The non-recourse, permanent financing will allow Barnett Capital to expand its core lending business and continue providing capital to organizations and individuals, who are unable to obtain traditional bank financing.
According to a senior underwriter at Terrace Capital, "Barnett had specific requirements which had to be met for certain business needs such as maximum leverage, the ability for partial releases of collateral and the flexibility to use letters of credit for reserves, instead of cash". Despite the challenges of working with single tenant buildings, multiple short term leases and several tertiary locations, Terrace was able to structure a max leverage CMBS deal which allowed for partial releases with acceleration rates as low at 105%, by cross collateralizing the assets and minimal use of letters of credit to mitigate lease rollover risk.
About Terrace Capital
Terrace Capital focuses on non-recourse loans and preferred equity of $5MM and greater on income-producing retail, office, industrial, multifamily, self-storage and hotel properties throughout the continental United States.
The Firm is a leader in providing permanent mortgages and equity for wide range of real estate transactions.
For more information about Terrace Capital and the services it provides, go to www.terracecapital.com.