Wheeler Block Building

Transaction Details

The Wheeler Block Building is a 6-story, 32,855 square foot brick and timber office building located in Denver’s vibrant Lower Highlands (LoHi) neighborhood. In a highly-competitive market, the Wheeler Block Building represents a rare value-add opportunity with 7,600 square feet of vacancy (~25%), high tenant rollover in the next three years (~60%), and below market rents (more than $5.00/SF below the current market average).

The Proposition

Essex was approached by its private capital client to arrange short-term, non-recourse bridge financing to acquire the Wheeler Block Building and execute its business plan. The client’s business plan is to acquire the Subject Property, backfill the vacancy, renew the under-market rents, stabilize the asset, and refinance long-term in accordance with its platform’s long-term hold strategy.

Our Solution

Essex Financial Group arranged a $5,000,000 non-recourse bridge loan with one of its exclusive life insurance company relationships. The 5-year, fixed rate loan is 65% LTV and has a competitive interest rate with a 30-year amortization. The execution with a life insurance company allows the client to roll into a more permanent loan upon completion of its business plan with a minimal cost and prepayment penalty. With positive debt coverage in place at closing, the lender did not require a debt service reserve, holdback, or any additional structure.