Boston Commercial Real Estate Rebounds

Boston Commercial Real Estate Rebounds

Financial Compound refinance office building in suburban Boston

Across New England there are numerous pockets of strengthening commercial real estate markets.  For example, many of Boston’s suburbs are currently enjoying an economic recovery, along with increased commercial rental rates and reduced vacancy rates.  Multi-family properties are especially strong with a virtual 0% vacancy rate and properties trading at capitalization rates around 5%.

As an example, Financial Compound recently arranged for an $8.4 million office building refinance in suburban Boston.  The class B property, built in the 1960’s,  has a history of stable cash flows and tenancy.  Current occupancy is 83% due to a recent corporate relocation.

Financial Compound was able to demonstrate the transaction offers a 51% LTV and 1.72 DCR and procure a non-recourse, 10-year fixed rate loan with a 4.65% interest rate and 30 year amortization, no lender fee and modest prepayment penalty of 1% in years 4-10 and 7% in years 1-3 as well as modest closing costs.  The mortgage interest rate was set at the time of loan application signing.

 

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