Dealmaker: MetroGroup Realty Finance Secures $39M in California

MetroGroup Realty Finance, Newport Beach, Calif., arranged $39.2 million for industrial properties totaling 566,285 square feet in southern California.

J.D. Blashaw, Vice President at MetroGroup, said interest in financing industrial properties has grown as investors and owner-users take advantage of the competitive market and seek to lock in low interest rates.

“Over the past two years, industrial has outperformed virtually all other real estate sectors, with demand and activity reaching record highs as 2021 came to a close,” Blashaw said. “The market continues to be highly competitive, particularly in the prime markets of Los Angeles and Orange County, which offer close proximity to the ports, major thoroughfares and large population hubs and where companies such as Amazon are snapping up industrial spaces to keep up with rising e-commerce demands.”

MetroGroup provided $29 million in refinancing for a five-building, 503,150-square-foot industrial park in Los Angeles County submarket Pomona, Calif.

The property is fully occupied by tenants ranging from light manufacturing to warehouse and distribution. The loan closed with an interest rate in the high-2 percent range, fixed for 10 years with interest-only debt service.     

“The financing allowed our client to reduce the interest expense and payment on the existing debt in today’s historically low rate environment, while tapping earned equity in the project for other investment opportunities,” Blashaw said.

MetroGroup also secured $10.2 million for a 63,135-square-foot industrial property in the Los Angeles County submarket of City of Industry. The building is fully occupied by two users. 

The borrower requested cash-out refinancing to provide working capital to support its growing business recovering from the impacts of the pandemic, said MetroGroup Vice President Ivan Kustic, who arranged the loan.

“We have worked with many owner-users who seek cash-out refinancing to help ease the impact of the pandemic,” Kustic said. “We were able to provide an SBA loan after working directly with the CDC and our lender to provide cash-out refinancing at competitive pricing, despite historical cash flow not initially supporting the loan request.”

Kustic noted the financing closed with a blended rate in the low-3 percent range for the projection-based loan.