Fident Capital secured a $5.3MM loan for the refinance and improvement of a multi-tenant neighborhood retail center in the historic core of Poway, California. A regional Bank provided the financing that returned a significant portion of the borrower’s initial equity investment and funded all future cost of renovation at a fixed rate of 4.8% with an open prepay.
The asset sits on “main-street” in the heart of the community and final touches to the borrower’s deep renovations were needed to return the center to its original charm. The experienced local borrower will add 7,000 SF to the existing 28,000 SF center by completing a build-to-suit project for a local brewery, expanding several patio spaces for existing tenants and performing other façade improvements.
Challenges to the project included the scope of a build-to-suit which involved the immediate construction of a new structure, a lack of credit in the local mom-and-pop tenant mix, a number of freshly minted leases that enjoyed free rent for their first 6 months, and the need for non-recourse financing given borrowers ownership structure.
Fident procured a lender that understood the borrower’s business plan, the strength of the location, the dramatic value-add that had taken place, as well as the impact of the borrower’s “finishing touches.”. The negotiated loan provided $800k of future funding, a swap execution to fix the rate, and an interest only term with zero prepayment penalty to allow the borrower flexibility on the exit.