$12 Million Auto Shopping Center Loan Arranged by IPA Capital Markets
Jun 29, 2016

SAN JOSE, Calif., June 29, 2016 – Institutional Property Advisors Capital Markets (IPA Capital Markets), a leading provider of debt and equity placements and advisory solutions for major investors, has arranged $12 million in financing for a loan against land under a 13-acre auto shopping center in San Jose.

Anita Paryani, vice president capital markets, and Jake Roberts, first vice president capital markets, both in IPA Capital Market’s West Los Angeles office, arranged the debt placement.

“The borrower, a client we have a long-standing relationship with, was focused on refinancing the land in order to take advantage of new long-term land leases from several car dealerships including CarMax,” says Roberts. “Many lenders struggle with financing projects associated with car dealerships, even when the loan is on the land that is leased by the dealerships, yet we were able to identify a lender who could properly value the asset and provide a very flexible prepay for the owner.”

“In order to meet our client’s investment goal and maximize proceeds, we had to underwrite the full rent of the new dealership despite the fact that full rent payments wouldn’t begin until construction was completed,” adds Paryani. “We had to get the lender comfortable with that aspect of the transaction.”

The loan was structured with an adjustable rate at 200 basis points over Libor. The loan-to-value is 50 percent and the term was 3-years with no prepayment penalty.