Timbercreek Provides $30M Bridge Loan to Recap Charlotte Office Building

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Canadian commercial real estate investment firm Timbercreek Asset Management has provided $30.3 million in bridge financing to Grubb Properties for the recapitalization and lease-up of a recently renovated office building in Charlotte, N.C., Commercial Observer has learned. 

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The 42-month, floating-rate loan covers the recapitalization of a 10-story suburban office property called 1515 Montford Park, just south of Charlotte.

“Grubb Properties has completed the heavy lift and with the remaining vacancy concentrated on the upper floors, we look forward to seeing the asset through lease-up and stabilization,” Timbercreek executive director Patrick Maroney said in a prepared statement. “Charlotte continues to show strong signs of growth and investor liquidity and remains a target market for the U.S. debt fund.” 

A Greystone Capital Advisors team led by president Drew Fletcher, who served as the exclusive advisor, along with executive managing director Paul Fried, vice president Matthew Hirsch, senior associate Steven Deck and analyst Cassandra Connolly, arranged the transaction on behalf of Grubb. 

The roughly 123,000-square-foot office building is located at 1515 Mockingbird Lane in the city’s Montford neighborhood, and it sits within a nearly 11-acre mixed-use campus that Grubb is redeveloping, according to information from Greystone. Grubb recently wrapped up what was a floor-by-floor renovation of the office building, which it undertook in 2017; the work included large-scale upgrades to building systems. 

There’s around 29,000 square feet of space available at the property, with asking rents at $28 per square foot, according to Grubb’s website. The building includes a tenant lounge and a fifth-floor balcony, and there’s also a fitness center located next door. 

Brokerage CBRE currently handles leasing at the property, according to property information on Grubb’s website. 

In May last year, Bloomberg reported that Toronto-based Timbercreek launched fundraising for its largest ever U.S. debt fund, seeking $1 billion for a closed-ended vehicle that would deploy $10 million to $35 million loans, such as this one, on transitional properties across the country. The firm was aiming for returns in the 8 to 10 percent range, according to a September 2018 report by Commercial Mortgage Alert. 

The vehicle will support financings with loan-to-value ratios of up to 80 percent for most property types but multifamily, which can reach up to 85 percent, according to Commercial Mortgage Alert’s report; the fund will not target ground-up construction opportunities, instead focusing on “heavy rehabilitation.”

Maroney was brought on by Timbercreek last year — from New York-based lender Annaly Capital Management — to head up the development and operation of the fund.