SAN DIEGO, May 4, 2016 /PRNewswire/ -- Versant Commercial Brokerage Inc. announced today that it has successfully recapitalized the 256,000-square-foot Met Center 15 building located in Austin, Texas. Versant assisted the tenant-in-common investors by originating new senior debt and preferred equity, overseeing structural remediation, and utilizing Internal Revenue Code Section 721 to roll up the TIC structure into an LLC on a tax-deferred basis.
In 2010, the TIC owners discovered that there was a construction defect at the property. Expansive soils underneath the slab were causing the building to shift. At the same time, their loan was maturing and lenders were unwilling to refinance the property due to the construction defects. In addition, the owners did not have the financial resources to pay for the $4MM remediation cost.
Versant designed a financing package to maximize returns for the TIC investors. "This was a particularly challenging project due to the construction defects and the timing of the lease renewals for Progressive Insurance and Waste Management. Complicating matters further, the bridge lender we selected discontinued their bridge financing line of business two weeks before closing. Despite this setback we found a replacement lender and closed on schedule," commented Matt Mueller, President of Versant. "Without support from the TICs and the efforts of a strong team, this property would have been lost."
With the assistance of Ethan Schelin of Landmark Capital Advisors, Versant originated new debt of $28MM and $4.5MM of preferred equity. Versant tapped its large network of investors to originate the preferred equity and complete the bridge recapitalization. The new sponsor is Virtua Partners, which also provided the loan guarantees.
"We appreciate the years of effort that were required to work through all of the issues," said Lorraine Bier, investor steering committee member. "This was an incredibly complicated transaction and we are delighted that we are going to see a return on our investment."
About Versant Commercial Brokerage
Versant Commercial Brokerage, Incorporated is a commercial real estate firm that focuses on recapitalizing tenant-in-common owned properties. Versant specializes in providing high quality investment opportunities for individual investors by creating access to exclusive deals. Our professionals have consulted on over $3,000,000,000 of commercial real estate engagements.
Through a private network of investors, we provide debt and equity capital for commercial real estate projects. Our network of relationships, sophisticated analyses, and experience in deal structuring give us unique capabilities to place debt and equity for real estate projects nationwide.
Please visit http://www.versantcre.com to learn more about our investor services.
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SOURCE Versant Commercial Brokerage