Deal Summary
INSIGNIA Financial Services arranged $4,086,000 of senior and SBA 504 financing for the $4,375,000 owner-occupied acquisition of a 7,500 square foot freestanding retail building in Mission Viejo, California. The financing represents 90% of total project cost.
| Item | Detail |
|---|---|
| Transaction type | Owner-user acquisition, SBA 504 |
| Property | Freestanding retail, 7,500 square feet, built 1995 |
| Location | Mission Viejo, California 92691 |
| Purchase price | $4,375,000 ($583.33 per square foot) |
| Total project cost | $4,540,000 |
| Total financing | $4,086,000 (90% of project cost) |
| Borrower structure | Eligible passive company owning the real estate, leased to the operating company |
The Transaction
A retail luxury appliance dealer acquired this vacant, single-story retail building in Mission Viejo to expand its growing network of showrooms, design centers, and service centers. Financing combined a bank first mortgage with a 25-year SBA 504 debenture fixed at 5.922%, and the borrower contributed 10% equity.
Capital Structure
| Source | Amount | % of cost | Terms |
|---|---|---|---|
| First mortgage, bank | $2,270,000 | 50.0% | 25-year fixed |
| SBA 504 debenture | $1,816,000 | 40.0% | 25-year fixed, 5.922% |
| Borrower equity | $454,000 | 10.0% | Cash contribution |
| Total project cost | $4,540,000 | 100.0% |
INSIGNIA
Owner-occupied commercial real estate is a core part of our practice, and SBA 504 is one of several programs we leverage for our client’s CRE financing needs.
This summary describes a closed transaction for informational purposes and is not an offer of financing or a statement of current pricing, which varies with market conditions, property type, sponsor credit and program requirements.
