Seattle Industrial Build
August 29, 2022
Funding for New 160,000-Square-Foot Building Includes Two Years of Interest Only Payments During Development, Transitioning to 30-Year Amortization for Remainder of Seven Year Term
Pacific, Wash. – Gantry, the largest independent commercial mortgage banking firm in the U.S., has secured a construction-to-permanent loan valued at $18 million in total consideration for the spec development of a 160,000-square-foot industrial property. The project, located in the city of Pacific on 12-acres logistically positioned to serve operators in the greater Puget Sound region, broke ground in Q2 2022, with delivery in early 2023.
Gantry’s Mike Wood, Principal, and Alex Saunders, Associate, with the firm’s Seattle production office secured the funding on behalf of the borrower, Davis Property Investment LLC. The 7-year loan was provided by a regional bank with a fixed, sub-4.4% interest rate, featuring an initial 2-year interest only period before moving to a 30-year amortization for the remaining term. Initial funding is for $15 million to complete construction, with an additional $3 million earnout upon lease up and stabilization of the project.
According to Gantry’s Mike Wood, “Demand for new industrial property in the Puget Sound region has remained resilient, with a strong appetite for modern space from last mile distribution, regional warehouse, and other industrial operators continuing to motivate developers that can deliver quality product. Davis Property Investment, an experienced owner/developer of industrial properties in the Pacific Northwest, decided to move forward on a speculative basis with a location exhibiting the right fundamentals to meet projected market demand. After reviewing several funding options, we were able to secure a loan at a low fixed rate from a regional bank covering the project through construction to stabilization over a seven-year term. Loans of this type are an especially appealing structure in the present rising interest rate environment and remove interest rate risk upon completion.