Office - Debt

NorthMarq Capital

NorthMarq Capital’s Los Angeles office arranges $79 million floating rate loan for The Atrium in Irvine, California

NEWPORT BEACH (September 21, 2018) — NorthMarq Capital’s Los Angeles regional office arranged a floating rate loan on The Atrium, a trophy office property in Irvine, California. The initial funding was $79,774,718 with future funds available for capital improvements and leasing costs. Joe Giordani, vice president, arranged the financing on behalf of The Kelemen Company. 

The 302,877 sq. ft., 10-story property is located at 19100 & 19200 Von Karman Avenue in the Irvine Business Center and sits on the border of Irvine and Newport Beach near the intersection of Campus Drive and Von Karman Avenue. It is located in one of the top performing office submarkets in Orange County and features a unique common area atrium with well-known Bistango restaurant on the ground floor.

According to Giordani, the building’s substantial lease rollover in the coming years, coupled with below market in-place rents, presented a timely opportunity for the borrower to capture the upside rent potential and increase the property’s Net Operating Income. 

The Kelemen Company plans to create value through lobby and common area renovations, adding a fitness center and conference center, and rebranding the asset that has been with the same ownership for nearly 20 years. The property will offer similar amenities and design to newly completed office buildings in Orange County at a significant discount to Class A rents. Kelemen purchased the property from Baring’s for $106,750,000, or $352 per square foot. 

“Kelemen is excited to upgrade Atrium’s design and amenities up to current market leading standards. We look forward to adding amenities for our existing tenants and providing a more collaborative environment at value-driven lease rates,” said Tibor Kelemen, founder of the Kelemen Company. 

Giordani identified over 20 potential capital partners who offered best-in-class pricing and expertise. Ultimately, the borrower chose a 78 percent loan-to-cost, floating rate loan at an attractive rate. The lender is a large asset manager with aggressive foreign capital.

The five-year loan features full-term interest only, flexible prepayment, and significant future funding for capital improvements, tenant improvements, and leasing commissions.

“NorthMarq was able to identify lenders willing to offer up to 87 percent loan-to-cost financing at pricing in the mid 300’s. Ultimately, Kelemen chose a conservative loan option with pricing well inside of 300. The debt markets remain extremely liquid and Kelemen was able to choose a partner who recognized their ability to reposition institutional quality assets by utilizing his creative vision, attention to detail, and local market knowledge,” said Giordani.

The transaction represents Kelemen’s eleventh office repositioning in Orange County.

NorthMarq Capital, the largest privately held commercial real estate financial intermediary in the U.S., provides debt, equity and commercial loan servicing through over 300 mortgage banking professionals in regional offices coast-to-coast and services a loan portfolio of more than $52 billion. In select markets, the company offers multifamily and manufactured housing investment sales through NorthMarq Multifamily. As a leader in capital solutions through long-term relationships with life companies, CMBS platforms and local, regional and national banks, the company also has a long track record of multifamily loan origination through Freddie Mac, Fannie Mae and FHA/HUD. For more information please visit www.northmarq.com.