Last week Frankfort Plaza LLC submitted a loan application to refinance with a $2,550,000 loan subject to a 75% loan- to-value ratio, which equates to a $3,400,000 value. The loan is for a 10 year term at 5.46% subject to a final “rate lock” at closing, with a 30-year amortization schedule.
The $2.55 million loan will require reserves of about $5,000 per year for capital expenditures as well as about $19,000 per year for TI and leasing commissions which will be capped at $95,000. Annual cash flows will be approximately $92,000+ per year after debt service and reserves.
Upon the closing of the refinancing, Class A Members can expect to receive back 100% of the original $1,213,000 equity investment. We purchased the property for all equity. This capital event will trigger an additional return profit on your original investment. In addition a 7%+ payout was made on July 7, 2015. The security for the loan will not include the 1 ¼ acre “outlot” which we have for sale or build-to-suit for lease. The value of this parcel could be in the $300,000 range. We are obviously very pleased with our success, especially if we close this financing.
The build out is complete for our three new tenants and the shopping center is now 92% occupied and 87% of operating costs are absorbed by the tenants. The current leasing activity for the remaining vacant 1871 square feet includes a dentist and a personal trainer/fitness center and gym. Both prospects are in the early stage of selecting a location. We have a rendering for a potential retail building on the outlot to market to a Jimmy Johns, coffee shop or other drive thru retail/food tenants.
All tenants are now paying rent and the major costs of the build out are behind us, so the monthly cash flow will increase significantly going forward.
