RMR Mortgage Trust Obtains $34M Refi for Colorado Springs Assets
- Apr 13, 2021
RMR Mortgage Trust has closed a $34.3 million first mortgage floating-rate bridge loan to refinance a pair of commercial properties in Colorado Springs, Colo.
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RMR Mortgage’s manager, Tremont Realty Capital, was introduced to the transaction by Essex Financial Group, which advised the sponsor, Flywheel Capital of Denver.
The 25.9-acre Class B complex, also known as Interquest Office Campus, was built in 1998, according to information provided to Commercial Property Executive by CommercialEdge. It had been purchased by Flywheel in September 2018 for $27.9 million.
The properties are a 191,000-square-foot office building and a 97,000-square-foot industrial building at 10125 and 10205 Federal Drive, respectively, in Colorado Springs.
An initial advance of about $29 million was funded at closing, with future advances of up to $5.3 million available for tenant improvements, leasing commissions and capital expenditures. The loan is structured with a three-year initial term and a one-year extension option, subject to the borrower meeting certain requirements.
In a prepared statement, RMR Mortgage President Tom Lorenzini noted, “Through the efforts of our manager, Tremont Realty Capital, this is our ninth loan closing, increasing our portfolio of committed capital to more than $250 million.”
The Colorado Springs office market is doing passably well despite the pandemic, driven mostly by renewed leasing by smaller tenants and secondarily by expansion of larger tenants already in the market, according to a first-quarter report by local firm Hoff & Leigh. Overall vacancy is 8.8 percent, and year-over-year rent growth was 1.7 percent.
On the industrial side, vacancies remain tight despite a modest amount of negative net absorption over 2020, also according to Hoff & Leigh. And although rent growth seems to be faltering, more than $30 million in industrial assets traded in the third quarter.
The RMR Group Inc., which is the parent company of Tremont—RMR Mortgage Trust’s manager—has recently closed a $680 million private capital investment vehicle that focuses on acquiring industrial and logistics properties across the country.