Lee & Associates NYC arranges $10.5 million in financing for New England acquisition and redevelopment projects

East Providence, RI Lee & Associates NYC’s Capital Advisory Group has arranged two commercial real estate financing transactions totaling $10.5 million, highlighting the team’s ability to structure creative solutions for borrowers pursuing acquisitions and value-add redevelopment opportunities throughout the Northeast.

Completed through the same lending relationship, both transactions featured customized financing structures that helped borrowers execute distinct investment strategies while securing terms that remain difficult to achieve in today’s lending environment, including sub-6 percent interest rates, 30-year amortization schedules and flexible prepayment provisions.  The transactions demonstrate how Lee & Associates NYC is helping relationship-driven borrowers secure customized financing for acquisitions and redevelopment projects that fall outside the traditional institutional lending market.

Led by senior managing director Dave Carswell and senior associate Ryan Fitzpatrick, Lee & Associates NYC arranged the financing on behalf of clients acquiring and redeveloping commercial properties in Rhode Island and New Hampshire, continuing the firm’s growing success advising New York and Northeast-based investors both within and beyond their traditional markets.

“Our clients are increasingly looking beyond their backyard for investment opportunities, and they need financing partners that can support their business plans” said Carswell.  “These transactions demonstrate how creative structuring and strong lending relationships can help borrowers achieve objectives that conventional financing often cannot.”

The first assignment involved a $5 million permanent first mortgage to Kempner Properties for the $8.5 million acquisition of a 13,000 s/f retail center at 75 Newport Ave. in the Rumford neighborhood.  Working against a tight 1031 exchange deadline, Lee & Associates NYC secured non-recourse financing in fewer than 60 days with a sub-6% interest rate, open prepayment, a 30-year amortization schedule and seven months of interest-only payments, allowing the borrower to complete the acquisition while preserving its exchange timeline.

The second transaction consisted of a $5.5 million permanent first mortgage to a private investor for the redevelopment of an 11,000 s/f former Rite Aid property at 1303 Woodbury Ave. in Portsmouth, N.H., into a medical office building.  Although structured as permanent financing, the loan incorporated construction financing features, funding tenant improvements, leasing commissions and a future funding component tied to lease-up, providing the borrower with flexibility throughout the redevelopment process.

The Portsmouth transaction reflects a broader trend emerging across the commercial real estate market as former drugstore locations become repositioning opportunities following the downsizing of several national pharmacy chains.

“These are the types of assignments where relationships and creativity make a real difference,” Carswell added. “Whether we’re helping preserve a 1031 exchange, facilitating an asset’s repositioning or advising borrowers investing outside their home market, our goal is always to build financing around the client’s business plan.

Financing for both transactions was provided by First Tech Federal Credit Union.

Transaction Summary:

Location: 75 Newport Ave., Rumford, R.I.

Property: 13,000 s/f retail center

Financing: $5 million permanent first mortgage

Highlights: Closed in fewer than 60 days to satisfy a 1031 exchange deadline; sub-6% interest rate; open prepayment; 30-year amortization; seven months of interest-only payments; non-recourse.

Seller represented by Bob Horvath & Todd Tremblay of Horvath & Tremblay. 

Buyer: Kempner Properties

Location: 1303 Woodbury Ave., Portsmouth, N.H.

Property: 11,000 s/f former Rite Aid being converted into a medical office building

Financing: $5.5 million permanent first mortgage

Highlights: Structured with construction financing features; future funding tied to lease-up with a cash-out component, tenant improvement financing and leasing commission funding.

Leasing brokers: CBRE