Houston Office Asset Lands $8M Refi

A crowdfunding real estate platform originated the 18-month mortgage to improve the overall returns and marketability of the property.

2224 Bay Area Drive in Houston
2224 Bay Area Drive in Houston

Grandbridge Real Estate Capital has arranged a $7.8 million refinancing for a Houston-area, 138,633-square-foot office asset, also known as the Jacobs Building. The owner is a sovereign wealth fund operated by the Republic of Nauru–the world’s smallest island nation–in the South Pacific. With just under 10,000 inhabitants, Nauru’s government developed Nauru Phosphate Royalties Trust to invest proceeds from a state-owned mining company.

Vice President Adam Lipkin of Grandbridge’s Miami team worked with the trust’s asset manager, Ben Jacobson of Blackstone Consulting LLC, to secure the 18-month loan. According to public records, Keystone Real Estate Lending Fund LP provided the mortgage that refinances a previous $6.2 million bridge loan, also arranged by Lipkin in late 2015.

“While conventional lenders are understandably challenged and conservative with terms these days, there are viable and creative lending options out there,” said Lipkin in prepared remarks.

Located at 2224 Bay Area Drive in the Clear Lake submarket of Houston–where a LEED-certified office property received $65 million in financing earlier this year–the six-story building is mostly occupied by Jacobs Technology, a wholly owned subsidiary of publicly traded NASA contractor Jacobs Engineering Group. Jacobs provides technical, professional and construction services to industrial, commercial and governmental clients.

The Trust hired the Miami-based asset management firm founded by Jacobson to assist with numerous challenges and improve overall returns and the marketability of the asset. Within the last 18 months, Jacobson solved prior management issues, renegotiated and extended the lease term and improved operations and returns.

“There aren’t many creative, outside-the-box commercial financing options, especially not for foreign-based borrowers,” Jacobson noted in a prepared statement. “We worked together to ensure the eventual lender would be thrilled to underwrite this asset in a strong office submarket,” he added.

Image courtesy of Yardi Matrix