Cronheim Mortgage Finances Suburban NJ Office Properties for a Total of $13.8 Million
Janet Proscia and David Turley arranged a total of $13.8 million in three Northern and Central New Jersey office transactions. These were a $3.0 million loan for two medical/professional buildings in Princeton Township; $5.2 million for two sister office buildings on Route 22 in Bridgewater; and a 64,511 sf medical office building in Clifton for $5.6 million.
The Princeton properties were financed with a New Jersey bank for 15-years, with rate resets every 5 years. The bank was able to provide non-recourse financing, which was of key importance to the client. The buildings provided at total of 27,919 sf and are located just off of Route 206, about 2.5 miles north of downtown Princeton. The buildings were construction in the mid-1990’s and have been very well maintained. Turley commented, “The owner approached us when an existing tenant wanted to expand and there was a need for capital to make it happen. The timing of locking in this loan while rates were still at all-time lows enabled a recapture of previously invested capital for new tenant improvements and future capital projects.”
The two Class “B” office buildings on Route 22 in Bridgewater were constructed in 1987, contain 58,415 and 21,273 sf, respectively and are minutes east of Bridgewater Commons Mall. At the time of closing, the properties were 100% leased. Cronheim secured a 20-year self-liquidating mortgage with Southern Farm Bureau Life Insurance Company, for whom it is a correspondent and loan servicer.
Mrs. Proscia noted, “There were challenges in getting this deal done – not everyone is willing to dig in and understand the individual submarkets of New Jersey Suburban Office. Our lender listened to the story. The added bonus was that we locked rate prior to the run-up and secured a 3.85% 20/20 rate which is unheard of!”
The Clifton medical office building loan was recently funded by a newly acquired Cronheim correspondent capital source, Members Capital Advisors. This transaction was not without its challenges. While well located and historically enjoying stable occupancy, there was a dip to only about 80% tenancy at the time of underwriting, the property is subject to not one, but two ground leases, and has leases that roll within the term. Working in concert with the borrower and lender, we were able to structure a 10-year, non-recourse transaction that was satisfactory to all parties.
Proscia noted, “The correspondent system is a real asset to our client base – we can get in front of the lenders in a way that others cannot and stay there throughout the life of the loan if something is needed. This will always be a relationship business.”