A lender’s flexible structure and approach should be important for borrowers
By Erik Tellefson
Assumable loans generally allow for the debt to be assumed by another party, typically at the lender’s discretion and in exchange for an assumption fee. While an assumption provision may seem insignificant relative to more key loan terms like rate, term, loan amount, whether or not a loan is assumable has real world implications.
Regarding the transaction highlighted below, Stage Equity Partners purchased the subject medical office building (MOB) approximately one year prior to the closing of the transaction. During Stage’s one year of ownership, the tenant composition changed as a result of a health system purchasing two of the physician tenants. In light of the combination of a decline in cap rates over that period of time and the enhanced tenancy, Stage elected to sell the building.
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