Overview
A split condominium structure financed roughly 90% of the property conventionally. The owner cut borrowing costs by about $600K a year and $2.4M over the loan.
Contact
Tom Kessel
Principal
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The Situation
The center was otherwise fully leased with long-term tenants and strong income. The declines came down to a single tenant: a cannabis grow operation.
The Constraint
The cannabis component rendered the property unfinanceable by conventional lenders, blocking acquisition financing for an otherwise high-quality asset.
The Structure
Working with legal counsel, we separated the cannabis-occupied portion into its own condominium unit. The non-cannabis portion was financed through a conventional bank loan, while the cannabis segment was financed separately by a non-bank lender.
The Outcome
Conventional financing covered roughly 90% of the property, cutting blended borrowing costs by about $600K per year and roughly $2.4M in interest over the life of the loan.
