Cronheim Mortgage Secures $16.16MM for Elkton, MD Medical Office & Retail Property
David Turley and Janet Proscia of Cronheim Mortgage secured a $16.16 million securitized loan for the mixed-use property located on East Pulaski Highway in Elkton, MD. The funding retired existing debt and enabled the owner to recover substantial trapped equity. The 70% LTV, 85% loan-to-cost financing was locked for a 10-year loan term on a 30-year amortization schedule.
The Project includes a 78,800 sf medical office building converted from a former Wal-Mart, a built to suit 5,000 sf Urgent Care facility and an Olive Garden pad site. The Borrower, who purchased the Wal-Mart building in 2005 and redeveloped it in 2011, successfully repositioned the subject property for medical office use. At the time of closing, about 7,900± sf of medical office space was still available for lease. Turley commented: “This was an excellent and creative adaptive reuse for an undersized Wal-Mart box. The owner, a physician himself, saw an opportunity to develop, at an attractive basis, a multi-specialty medical complex in a highly visible retail location with an abundance of parking.”
The Property’s location, right at the state line between Maryland and Delaware, gives it unique access to hospitals and their patient bases in both states. Physicians at the property are connected to Union Hospital locally, Christiana Care Health Services in Newark, DE and both Union Hospital and Wilmington Hospital in Wilmington, DE.
Proscia noted: “We closed this during a period of dramatic credit spread widening. The lender’s profit margin had completely disappeared between the time we signed the loan application and closed. We negotiated a compromise between both parties that gave the lender an incentive to close and kept the key business terms of the deal in place. This validates our thesis that the key to a successful CMBS execution is a mortgage banker who understands the securitized market and has the relationships and credibility to protect the client’s interests.”