Jeff Glenn

Managing Director

333 University Ave., Suite 200, Sacramento, CA  95825

916-565-7487 Office  |    916-565-7432 Fax



Sacramento, CA

Jeff Glenn, Managing Director with Barry Slatt Mortgage recently closed a $14,850,000 office portfolio consisting of seven properties located in Sacramento.


The Challenge:

  • While the objective was to refinance each property through one resource, most of the lenders we engaged were only interested in refinancing a portion of the portfolio, excluding those properties that were considered to be of greater risk.
  • Although some of the properties were stabilized, others had vacancies, which significantly reduced the borrower's options.
  • Several lenders fell short on proceeds, based on their underwriting policies.
  • The majority of the lenders we spoke to were unwilling to offer release clauses, without waiving excessive prepay penalties.


The Mitigating Factors in Reducing Risk to the Lender:

  • The borrower acquired the portfolio prior to the recession and was able to weather the storm, in spite of large vacancies, specific to the Sacramento office market.
  • Each property was well managed and consistently maintained, which was a motivating factor for tenants, when it came to renewing their leases.
  • Although, some of the properties were not stabilized, the global operating history was strong, dating back to when the borrower acquired the first asset.


The Outcome:

After contacting 24 lenders, we were able to offer the borrower the exact structure that he requested.

  • In order to provide maximum proceeds, the lender decreased the loan amounts on those properties with vacancies, while increasing the proceeds on others that were stabilized.
  • In addition to retiring the existing debt, the lender agreed to offer the borrower cash-out.
  • Interest Only was provided for the first three years of the loan term.
  • Flexible pre-pay penalties with release clauses.
  • While the borrower had to prolong the closing until his existing prepay penalties burned-off, the lender honored the rate, in spite of the fact that rates increased by .60 basis points, from the time the refinance process began.