Merced, CA, November 17, 2015 --(PR.com
)-- As they head toward the end of the year in Q3 & Q4 2015, Altoma Real Estate Advisors LLC, a commercial real estate mortgage intermediary with unwavering resolve to deliver the very best of the capital markets, closed on their fifth and sixth loan of 2015. The fifth loan, a medical office closed in September for $6,000,000, brought Altoma to the Phoenix MSA for their first Arizona closing of the year. The next loan, marking their sixth for the year, brought them back to their home turf of Central California; on a $5,700,000 loan for a retail center in Selma (Fresno SMSA). The Selma deal is Altoma's second transaction completed in California for 2015.
Of the company's recent closings and upheaval in credit spreads for the securitization market, Altoma Principal Dean Sparks said, "Closing deals from late July to present time has not been for the faint of heart. Our September and November closings were examples of running through a gauntlet of uncertainty about the market and tirelessly working to ensure client's expectations were met. We've found the only way to properly address widening on the side of the coupon that borrowers generally perceive to remain static, is pure transparency and on-going discussion until closing. It's the only way to ensure client retention, and we're pleased with how we performed during a tumultuous time."
The September 3rd, 2015 closing was a 100% occupied, 29,466 NRSF Class B medical office complex in a sub-market of Phoenix. Altoma's client requested absolute max leverage in order to cash-out all available equity and allow the property to be offered for sale with the lowest possible equity investment on an assumption post closing. As is the case with so many deals, the challenges consisted of major near-term rollover of key tenants comprising over 40% of the space. Altoma was able to showcase to lenders a very strong sub-market; subject property's proximity to a major hospital and substantial TIs recently paid for by the largest tenant; in order to push proceeds so high on an otherwise difficult "ask." The 75% LTV, $6,000,000 non-recourse loan closed at 4.94% fixed for 10 years with 24 months IO, and amortizing 30 years thereafter. The loan amount was achieved on a "true" LUWNCF Debt Yield of 8%, which is highly enviable for office, and especially in Phoenix. The client is currently in the process of selling the property and will benefit greatly from the max leverage and 2 years IO; given that a new buyer will have minimum equity contribution and lower initial periodic payments.
The November 3rd, 2015 closing was a 97.8% occupied, 42,045 NRSF Class B- shadow anchored retail shopping center in Selma, CA; which is located just south of Fresno. The client's goal was to cash-out a very healthy amount of equity, though they also desired lower mortgage payments through the max amount of IO years allowable for the ask. Challenges on the deal included a lack of transparency on lease term and occupancy cost for the "not a part" grocer as well as a dark junior anchor box, which was also not a part of the collateral. Altoma was able to convey to lenders the outstanding historical occupancy and consistent renewal of tenants; the majority of which were local non-credit types, though had successfully operated in the center for many years and catered to certain ethnic elements. The 65% LTV, $5,700,000 non-recourse loan closed at 4.54% fixed for 10 years with 60 months IO, and amortizing 30 years thereafter. The client now has an annual debt service of $30,000 less a year than their previous loan (on the first 5 years of the term) and net cash-out after closing costs approaching $2,000,000.
As the year winds down, Altoma is vigorously working to close additional transactions in 2015 and to also make Q1 2016 their most voluminous quarter ever. One of Altoma's key goals at present time is to increase both transaction volume and loan size. In relation to Altoma's goals and the quest to improve their footprint, Altoma Principal Dean Sparks said, "We've been successful in identifying and executing on opportunities in the middle market of $5,000,000 to $15,000,000. However, we are always on the hunt for principals with larger transactions over $20,000,000 and even north of $50,000,000, to give us an opportunity. On a fair playing field, we are not afraid to compete against any of the shops on the street; all of whom are vastly larger than us. We compete with them on the middle market deals and more often than not, come out ahead. We feel the same occurrence is totally possible on larger transactions, though it takes time to cultivate those relationships and get past the stigma of being a smaller outfit."
About: Altoma Real Estate Advisors LLC is a commercial real estate mortgage and capital markets intermediary based in California. Founded by Dean Sparks in 2012, Altoma started focusing solely on CRE debt placements by 2014, and quickly established themselves as an "outlier." Altoma advises on financings from $1mm to no ceiling, in all CRE asset classes, and in every investment profile. Their clients range from large developers and operators to principals with a single asset.