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HFF, L.P is pleased to present the opportunity for qualified investors to acquire a 100% interest in a $17.3 million ($95 PSF) well-performing first mortgage loan (the “Loan”) collateralized by a 182,317 square foot medical office building located in Newark, New Jersey (the “Collateral” or Property”). The Loan was originated in September 2015 for a 10-year term and carries a fixed-rate of 6.16%, amortizing on a 25-year schedule. As of January 2018 the Loan is current and performing per the in-place terms.
The Property is currently 81.1% leased to several medical-related tenants, catering to the Property’s proximity to four (4) nearby hospitals with a total of nearly 1,800 beds. Of the Collateral’s total leased space, 126,653 square feet (69.5% NRA) is associated with an owner-affiliated tenant whose lease expires five years beyond the Loan’s maturity date.
This sale presents investors with a rare opportunity to acquire a fixed-rate performing loan with strong metrics and secured by collateral with limited rollover during the term.
Investment Highlights
Performing Senior Mortgage Loan – The Loan was originated in September of 2015 and remains performing per the in-place terms.
Attractive in-place metrics – The Loan has an interest rate of 6.16%, less than eight years remaining term and has an LTV less than 60% based on origination metrics.
Limited Rollover – The Property is 81.1% leased with only 10.7% of the NRA having the option to roll during the Loan term. The lack of near-term rollover allows the sponsor to focus their efforts on leasing the remaining vacant space and pushing occupancy in-line with the market.
Nearby Medical Demand Drivers – The Property is situated in an ideal location for medical office as there are several hospitals within a short distance including the Clara Maass Medical Center (429 beds) Saint Michael’s Medical Center (411 beds), United Hospital of Newark (429 beds) and the University Hospital (519 beds). These hospitals provide for a consistent demand driver for the Property.
Established Medical Office Micro-Market – Located within a three-mile radius of the Property, there is over 1.2 million square feet of medical office space. The micro-market has averaged 11% vacancy over the last five years with positive absorption three of the last five years. The micro-market benefits from its infill nature with only 85,000 SF of deliveries in the last 12 months and no planned construction.
Excellent Location – The Property benefits from a densely populated area that features approximately 400,000 people living within a three-mile radius. The Property enjoys excellent proximity to several of the area’s major thoroughfares, including 1-250, Highway 21, and Highway 19. This prime location allows tenants to enjoy quick and convenient access into downtown Newark and the various suburbs surrounding it. The Property is also located proximate to the Davenport Light Rail Station.
Additional Information
| Tom Hall Managing Director tohall@hfflp.com 212.209.4501 |
Stephen Schwalb Associate sschwalb@hfflp.com 469.221.7777 |
Kyle Shaffer Real Estate Analyst kshaffer@hfflp.com 469.232.1903 |
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