Financing for a 1970’s Industrial Office Park

The Art of Balancing analytics and creativity to secure short and long-term financing from recourse and non-recourse lenders to reposition a 1970’s Office Park

Picture this – a 1970’s industrial park with considerable vacancies, needing some serious updating, upgrading and modernization, commonly known as Capital Improvements.

When tasked with leasing and financing the modernization and capital improvements of outdated industrial parks, it’s functional to get back-to-the basics starting with a basic, yet amended, SWOT analysis of Strengths, Weaknesses, Considerations and ultimately a success.


  • Location

  • Capital Investment Schedule Maintained

  • Good Loan to Value Portfolio Wide


  • Lease Rollover Schedule

  • Small Business & Local Credit of Tenants

  • Upcoming Capital Improvements Schedule

  • Over Budget on Recent Capital Improvements

  • National Economy


  • Initially the combination of these weaknesses drove up quoted rates on financing and prompted requests for large capital improvement escrows that would have greatly impeded ownership’s cash flow.

  • Mostly, this was because from a single lender’s perspective the complete eleven building portfolio contained many outdated and less desirable buildings that would require more conservative underwriting from a national lender’s perspective that was not as comfortable with local economy as a local lender would be.


  • I took as step back and applied a variety of underwriting scenarios to model and emulate each lender’s perspective

  • From this space, a hybrid solution quickly emerged achieving the desired results of both the ownership and lenders.

Solution: Loan #1 – National Lender

Mortgaged 3 of 11 Buildings

70% of required Debt

Non-Recourse, Fixed Rate, Long-Term Loan

Mid-High Loan to Value

Predominantly Regional & National Credit Tenants

Negotiated Carve-outs, Yield Maintenance, & Assignments

Solution: Loan #2 – Local Bank

Mortgaged 8 of 11 Buildings

Remaining 30% of Required Debt

Low Loan to Value

Pre-Approved Line of Credit to 65% Loan to Value

Predominantly Local Credit Tenants

Amended Existing Mortgage

Avoided Typical Loan Costs


  • Taking a step back and looking at the issue from all sides, I was able to see the hybrid approach, yielding a great result for ownership and strategically positioning them for the future

Today, ownership has continued to grow their holdings and they continue to win deals and discounts, because the line of credit allowed for a quick close. Those expedient purchases were made with confidence because of the consistent underwriting and continual evaluation afforded by the market knowledge and insights to our team. Every owner can create their own value similar to what happened here by identifying each stakeholder’s wants and needs and then proceeding appropriately. I learned by taking a step back, I could see the forest for the trees and logical solutions began to emerge.

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