Citizens Bank Lends $65M to Sabal and Oak Tree for National Office Portfolio

August 12, 2016

Source: Commercial Observer

Sabal Financial Group and Oak Tree Capital Management landed $65M in nonrecourse bridge financing from Citizens Bank on a 1.4 million square foot, 11 property office portfolio that spans six states. Mission Capital negotiated the transaction.


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Citizens Bank Lends

$65:1 to Sabal and Oak Tree forational Office Portfolio

Saba! Financial Group and Oak Tree

Capitai.Manqi!IDIInt lamlu

nonrecourse bridge finnncing from Citizens

Bank ou a 1.4million­

in strong markets,• Patrick Burns, the man· aging director for institutional real estate at Citizens, said through a spokeswoman. "Citizens is continuing to grow itscommercial rcalestatefinanccbusincssinkcymarkctswith experienced partners."

Proceeds of the financing will be used to­ ward capital improvements and leaseups on the properties,which arc in varying states of upkeep,said Draganiuk After purchasing the assets,Saba!came in with an ad:ivcasset man­

agement team and already did "a lot of heavy




lifting"in regards to renovations.

The loan from Citizens will provide Saba!

states, Commercial Observer Finance can first report.

A grou p of ucl.ll and l!quily bruhrs from

Mission Capitol negotitlted tho trnnsnction.which closed on J11. ly 20,ou behalf of the bor­ rowers. The team included Chad Coluccio, Alex Draganiuk anil Rugene Shevaldin.

The brokerage's relationshlp, it

OakTree a 'tually
lastseveral years the twofirms havejointlypur­
chased poolsofloans through Mission Capital. "Wedobusiness with [Saba! and Oak '!'reelon a lot of different levels, but I believe this wasour firstlargefinancing transaction where we rep­
resented them as a client,Coluccio told COF
over the phone.

Saba! and Oak Tree purchased a number of the assets that serve ucollateral for the Citizens loan through Mission Capital as well, some of which had defaulted loans or were realestate owned. The portfol:oinclud­ ed Beau Terre Office Park in Bentonville, Ark., Plnebrook Business Center I & II in Norristown, Penn., Financial Plaza in

Knoxville, Tenn.and Stamford Executive

Center in Stamford, Conn.

"This is a great deal with an excellent client and the portfolio features top office properties

and Oak Tree with the flexibility of being able to sell assets from the portfolio and pay down the loan rather than being tied down, said Coluccio,which was important to the borrow­ ers because some of the properties are closer to stabilization than others.

The properties have an overall blended

occupancy of 64.6percent,Draganiuk said.He noted that there was "a lot of cash flow going into this deal"and that the borrower was pro­ vided with a variety of financing options from lov.-er leverage bank deals, like the mortgage from Citizens, to debt up to SlOO million with a mezzanine piece.
AnothP.r positive nfthe ile:ll Wll that "[thP. lender] was willing to give the borrower a loan with relatively no minimum interest,• Draganiuk added "Some debt funds need at least12 to15to18monthsof minimum interest because they wantto makeacertain return,or guarantee they'll make a certain return, when underwritingassetsindifferentmarkets.They were really greatit's not always easy for peo­ ple tomanage .so many mnvingp:n1.:.

A representative from Saba!was not avail­ able for comment, and a representative for OakTreedidnotrespond toarequestforcom­ mentDanielleBaibi

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