May 26 2015
Allegiancy successfully refinances Fairfax Office Building in Richmond
RICHMOND, VA. – Allegiancy, a commercial real estate asset manager, has successfully closed a $16.5 million refinancing of the Fairfax Building in Richmond.
This transaction demonstrates the benefits of Allegiancy’s proactive approach to asset management. By refinancing now, Allegiancy is minimizing exposure to future tenant expirations and taking advantage of currently favorable capital markets. Beyond extending the maturity date of the mortgage, the refinancing also frees up nearly $500,000 in annual cash flow.
Allegiancy CEO Steve Sadler said, “This success provides further proof of Allegiancy’s philosophy that our hands-on asset management pays off for owners.”
Allegiancy President Chris Sadler said: “Allegiancy is extremely pleased to have orchestrated this attractive refinancing for the Fairfax Building and its owners.”
About The Fairfax Building
The Fairfax Building is a Class A suburban office building in southwest Richmond. The building is 98 percent leased and has maintained occupancy above 95 percent since its acquisition in 2006, due to proactive asset management and attention to detail. The property receives rents that are well above average for its submarket.
About the Transaction
The loan on the property was set to mature in June of 2016, so refinancing early incurred a pre-payment penalty. But looking ahead, Allegiancy asset managers determined that major lease expirations at the property, coupled with the high volume of commercial mortgage backed-securities (CMBS) maturing in 2016 and 2017, presented significant risks. When considering refinancing in light of the currently attractive market, Allegiancy determined that the benefits outweighed the costs.
Value to Owners
Chris Sadler explained: “The Fairfax Building is 60 percent leased to two major tenants with leases expiring in 2017. This would have made a refinance at mortgage maturity nearly impossible. Therefore, the property needed to be refinanced far enough in advance of the lease expirations for a lender to be able to give credit for those leases.”
“Our financial analysis showed that the pre-payment penalty would be recovered in lower mortgage payments, due to a lower interest rate, in about 24 months.”
Sadler added, “In order to effect a transaction such as this, the asset manager has to be thinking strategically. We understood the cost and benefits, did the appropriate financial analysis, and then sold the concept to the owners. We are pleased we were able to accomplish this beneficial transaction for the owners of the Fairfax Building.”
Allegiancy is changing the business of asset management for commercial real estate owners and investors. With an advanced technology platform and singular focus on serving as the owners’ advocate, the company brings fresh vigor to an often poorly understood business. Combining its proactive Value Assurance? operational rigor with an intense focus on cash flow and profitability, Allegiancy is expanding on a track record of more than four decades of success.
Headquartered in Richmond, Va., and led by a team of seasoned professionals and more than 100 years of experience, Allegiancy manages properties that have outperformed their peers by 45 percent since 2006. The company has approximately $300 million in assets under management (AUM) and delivers clients attractive returns and profitable, hassle-free investments in commercial real estate.
To schedule an interview with Allegiancy’s leadership, contact Audrey Bevel at email@example.com or 866.842.7545 ext. 204 or (804)201-7161.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are based upon the Allegiancy, LLC’s (the “Company”) present expectations, but these statements are not guaranteed to occur. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Investors should not place undue reliance upon forward-looking statements. For further discussion of the factors that could affect outcomes, please refer to the “Risk Factors” section of the offering circular dated January 14, 2014 and filed by the Company with the U.S. Securities and Exchange Commission on January 15, 2014. The offering circular, and any supplements or updates thereto, is available on the EDGAR system located on www.sec.gov.
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