Rialto Tapped for $35M Loan on Alabama Office Park
Danielle Balbi Oct. 23, 2015, noon
Matrix Realty Group, based in Long Island, borrowed $35 million from Rialto Capital Management to fund its purchase of the Meadowbrook North Office Park in Hoover, Ala., Commercial Observer can first report.
Meridian Capital Group arranged the two-year financing, which carries a Libor-based floating rate, interest-only payments for the full term and a one-year extension option. Managing Director Tal Bar-Or, Vice President Judah Neuman and Associate Kyle Kite of the brokerage’s New York office worked on the debt deal.
“This was an exciting transaction from the outset; from being live on the phone during the purchase auction to ultimately seeing the deal through to closing, Meridian worked hand-in-hand with Matrix the whole way,” Mr. Bar-Or said.
The office complex’s new owners are investing $2 million in renovations, which will include energy efficiency upgrades, a new fitness center, a café with table service, a new conference center, new elevators and Wi-Fi-enabled lobbies.
The office park—which is located at 100, 300, 500 and 1200 Corporate Drive on U.S. Highway 280—was listed for sale on the online real estate marketplace Auction.com in June with bids starting at $13 million, according to published reports. Matrix closed on the purchase in early October.
The Birmingham, Ala.-based real estate firm Daniel Corporation built the office park on a 175-acre site in 1986. The four Class A office buildings on the property total 509,000 square feet. The property itself has a 13-acre lake, a 1.3-mile walking trail, three daycare facilities and a U.S. Post Office. Tenants at the buildings include Blue Cross Blue Shield Association, Liberty Mutual of Alabama and both the state’s Department of Transportation and Postal Service.
The office buildings are 60 percent occupied and soon to be 90 percent full, according to Aaron Smiles head of commercial leasing for Matrix. Brad Jones, senior vice president at Cushman & Wakefield and its Birmingham, Ala.-based affiliate EGS Commercial Real Estate, is leading the building’s leasing efforts, he said.
Matrix Chairman and Chief Executive Officer Glen Nelson said he expects the stabilized value of the office buildings to be in the $75 million to $80 million range within the next 18 to 24 months.
“We have a strong alliance with Tal Bar-Or at Meridian Capital Group,” he said in prepared remarks provided to COF. “They are partners in all our acquisitions and recapitalizations and like always, they helped execute. Bret Ersoff at Rialto Capital Management was also instrumental in getting this transaction to the finish line.”
John Herman, chief operating officer and chief investment officer at Rialto, also worked on the transaction.
Matrix, which is based in Port Jefferson, N.Y., is a real estate investment and medical and information technology company, with a portfolio of 3.2 million square feet of Class A office buildings and 9,000 manufactured and multifamily residential units across the U.S.
A representative for Rialto declined to comment.
- Cushman & Wakefield
- Meridian Capital Group
- Rialto Capital Management
- Tal Bar-Or
- 1200 Corporate Drive
- Kyle Kite
- Judah Neuman
- Daniel Corporation
- Blue Cross Blue Shield Association
- Liberty Mutual of Alabama
- Brad Jones
- EGS Commercial Real Estate
- Meadowbrook North Office Park
- Glen Nelson
- John Herman
- Matrix Realty Group