The University of California Los Angeles' partially constructed 50,000 square foot outpatient medical facility has received a $38 million, 12-month forward financing commitment according to a GlobeSt.com article. The 12-month forward take-out commitment secured a non-recourse loan with a 10-year fixed rate of interest at 5.67 percent, with 30 years amortization. The medical center project is scheduled to be completed in December 2011 and promises LEED Gold certification.
"The borrower wanted to eliminate financing risk and lock-in returns, given market volatility. But lenders have recently refused to commit more than three to six months before funding, and premiums for such hedging were prohibitive." said Steven C. Orchard, a Senior Vice President at George Smith Partners, which arranged the financing. "We were pleased to secure a loan that exploits the low interest rate environment, and controls exposure to inflation during the remaining construction period. It reflects well on the sponsor and the project, but it also says a lot about our team at GSP. It was the culmination of our firm’s market expertise and strong relationship with capital sources."
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