Mission Capital Advisors Marketing Lake City Commons,
90,000-Square-Foot Retail Property in Atlanta Suburb

With occupancy of 98 percent, shopping center will offer investors a stable, income-producing asset

LAKE CITY, Ga. (July 9, 2018) — Mission Capital Advisors, a leading national real estate capital markets solutions firm, today announced that its Asset Sales Group is marketing Lake City Commons, a 91,494-square-foot community retail center located at 5656 Jonesboro Road in Lake City, Georgia. The Mission Capital team of Will Sledge, Kyle Kaminski and Tom Karras is marketing the property on behalf of the seller, a CMBS special servicer. The property will be auctioned on the RealINSIGHT Marketplace, with the bidding window opening on July 23 and closing on July 25.

Constructed in 1998, the property boasts a diverse array of tenants, including anchor tenant Kroger — which is signed to a triple net lease through 2024— as well as Dollar Tree, H&R Block, Metro PCS and Pizza Hut. In addition to occupying 69 percent of the property’s leasable area, Kroger also intends to construct and operate an on-site fuel center, which would generate additional traffic to the property.

The property has modest near-term rollover, and several of the tenants with expiring leases are currently in the midst of negotiating renewals.

“In today’s challenging market, many buyers are looking to invest in grocery-anchored shopping centers, which provide much more stability than conventional retail assets,” said Kaminski. “Kroger has been at this property since its opening, and the grocer has performed successfully for a full two decades. With Kroger investing its own capital in the on-site gas station, the credit tenant is clearly demonstrating its plans to remain at the property for the long term.”

The property is located within 14 miles of downtown Atlanta, positioning it in the country’s ninth most populous metropolitan area.

Investors are encouraged to visit the RealINSIGHT Marketplace for more details and bidding information: https://marketplace.realinsight.com/sales/details/237

About Mission Capital Advisors

Founded in 2002, Mission Capital Advisors, LLC is a leading national, diversified real estate capital markets solutions firm with offices in New York, Florida, Texas, California and Alabama. The firm delivers value to its clients through an integrated platform of advisory and transaction management services across commercial and residential loan sales; debt, mezzanine and JV equity placement; and loan portfolio valuation. Since its inception, Mission Capital has advised a variety of leading financial institutions and real estate investors on more than $65 billion of loan sale and financing transactions, as well as in excess of $14 billion of Fannie Mae and Freddie Mac transactions, positioning the firm strongly to provide unmatched loan portfolio valuation services for both commercial and residential assets. Mission Capital’s seasoned team of industry-leading professionals is committed to achieving clients’ business objectives while maintaining the highest levels of integrity and trust. For more information, visit www.www.missioncap.com.

About RealINSIGHT Marketplace

RealINSIGHT Marketplace is one of the nation’s leading online due diligence and auction bid platforms. RealINSIGHT provides local, regional, national, and international investors the opportunity to review and bid for loan and REO assets on an individual basis. For more information, visit marketplace.realinsight.com.

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Iconic Richland, Washington Office Property Offers Investors Significant Value-Add Potential

RICHLAND, Wash. (Feb. 26, 2018) — Mission Capital Advisors, a leading national real estate capital markets solutions firm, today announced that its Loan and Asset Sales Group is marketing the leasehold interest in Tri-Cities Professional Center, a 160,526-square-foot, two-building office property in Richland, Washington. Will Sledge and Kyle Kaminski of Mission Capital are marketing the property on behalf of the seller, a CMBS special servicer, while Derrick Stricker of NAI Tri Cities will serve as the showing broker. The property is being marketed on RealINSIGHT Marketplace. The bidding window for the property opens on March 6 and closes on March 8.

The Class-B property includes one five-story office building and one seven-story office building, which have an aggregate occupancy rate of 20 percent. The 9.74-acre property is subject to a ground lease with the city of Richland, which expires in 2042 and has two 15-year extension options.

“The Tri-Cities Professional Center is well-situated within the Richland CBD and poses a very intriguing opportunity for value-add investors,” said Sledge. “The city, which currently owns the leased-fee interest, will likely be open to selling its interest to the buyer, and the property is expected to sell at a significant discount to replacement cost. There’s a great deal of upside in this offering and it will be particularly attractive to local property owners who already have a working relationship with the city.”

The property is located within walking distance of the Uptown Shopping Center, which features a variety of dining and retail options.

Added Kaminski: “We also expect to receive interest from opportunistic investors seeking to convert the property into residential or hospitality use. Its prime location near several major roadways makes it easily accessible to the entire Tri-Cities metro, which has a population of approximately a quarter-million people. With a seller eager to divest of the property for a reasonable price, buyers have the unique ability to acquire an asset with significant potential at a very low basis.”

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Hoteliers who procure a ramp loan after renovating and prior to securing permanent financing are essentially cutting the effective interest rates by hundreds of basis points, Mission Capital’s Alex Draganiuk tells GlobeSt.com.

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Why Post-Renovation Ramp Loans Are A Smart Move

JUNE 13, 2017 | BY CARRIE ROSSENFELD

SAN DIEGO—Hoteliers who procure a ramp loan after renovating and prior to securing permanent financing are essentially cutting the effective interest rates by hundreds of basis points, Mission Capital’s Alex Draganiuk tells GlobeSt.com.

Draganiuk: “Lenders need comfort with a hotel and confidence that the recent renovations are something guests will be attracted to, and which will yield improved property cash flow.”

SAN DIEGO—Hoteliers who procure a ramp loan after renovating and prior to securing permanent financing are essentially cutting the effective interest rates by hundreds of basis points, Alex Draganiuk, director in the debt and equity finance group at Mission Capital Advisors, tells GlobeSt.com. The firm’s team of Draganiuk, Gregg Applefield and Lexington Henn recently represented property owner SD Carmel Hotel Partners LLC in securing a three-year loan from a private- equity fund as a $20.75-million ramp loan for the Hotel Karlan, a 174-key, soft- branded DoubleTree by Hilton located in northern San Diego. The first-mortgage financing will replace the property’s renovation loan and a preferred-equity loan.

After acquiring the property in 2014, the sponsor implemented comprehensive renovations to the property, enhancing guestrooms, common areas, food-and-beverage outlets and meeting and spa facilities.

According to Applefield, “In today’s market, it’s not uncommon for hoteliers to procure a ramp loan post-renovation prior to securing permanent financing, and the sponsor turned to us because of our extensive experience in this arena. Through a strong marketing effort, we were able to provide the sponsor with numerous competitive offers, including fixed-rate and floating-rate options with very high leverage for a hotel.”

The multimillion-dollar renovation includes remodeled guestrooms, a new dining concept, completely upgraded state-of-the-art spa with fitness center and two upgraded pools with outdoor cabanas. Hotel Karlan also features six distinct meeting spaces, totaling more than 14,000 square feet, as well as a pre-function space and an event lawn for weddings, musical performances, and other social events. Additionally, the hotel features a 4,000-square-foot ballroom.

We spoke with Draganiuk about the ramp loan and any obstacles to getting one.

GlobeSt.com: Why is it a smart move for hoteliers to procure a ramp loan post- renovation prior to securing permanent financing?

Draganiuk: Most of the ramp loans we have arranged are taking out higher-cost-of- capital non-recourse construction or renovation loans, so we are effectively cutting the effective interest rates by hundreds of basis points for our clients. In recent years, many hotel deals have included renovation components as buyers have attempted to improve or rebrand their assets. When financing an acquisition with a renovation, lenders are typically underwriting a combination of a lower in-place net operating income, as well as a potential disruption in cash flow, which can constrain the amount of debt lenders are willing lend, while yielding a higher interest rate. After the renovation is complete, the cash flow rarely stabilizes immediately, as it takes some time to reap the benefits of the renovation, and the owner is usually not yet able to secure a permanent loan, which typically requires a good nine to 12 months of stabilized operating history. At this stage, a ramp loan becomes appropriate, as refinancing the property can allow you to obtain additional loan proceeds, a reduction in rate, and/or eliminate any contingent liabilities related to a renovation or construction loan.

Hotel Karlan has undergone a multimillion-dollar renovation that includes remodeled guestrooms, a new dining concept, completely upgraded state-of-the-art spa with fitness center and two upgraded pools with outdoor cabanas.

GlobeSt.com: What are the obstacles, if any, to getting this type of loan?

Draganiuk: The primary obstacles with obtaining a ramp loan immediately post-renovation include proof of concept, limited in-place cash flow, and the potential recapture of equity invested in a property. Lenders need comfort with a hotel and confidence that the recent renovations are something guests will be attracted to, and which will yield improved property cash flow. To convince lenders that a sponsor is going to be able to increase performance, we work closely with our clients to study the market extensively. We then compare the property to competing hotels and explain how the reinvestment will enable it to outperform competition or at least sufficiently penetrate its new competitive set. We also use quantitative metrics to build a story showing that, while cash flow is not fully stabilized, there are a variety of strategies the owner can implement to achieve his business plan and meet projected performance levels.

GlobeSt.com: What else should our readers know about ramp loans in these situations?

Draganiuk: In addition to traditional lenders, there are a number of new entrants in the space. Many lenders prefer the opportunity to lend on assets that have already successfully completed the initial component of their business plan, because they have limited uncertainty compared with a construction/renovation project. Additionally, lenders are often looking to underwrite hotels at today’s room rates, at market-level operating margins, without assuming a hotel is significantly outperforming competitors. To the extent the underwritten metrics work at these levels, lenders are more willing to take out a construction or renovation loan with a new ramp loan.