Houlihan-Parnes Realtors.

Jack Houlihan of Houlihan-Parnes Realtors has arranged an $8.8 million first mortgage on an approximately 175,000 square-foot office building in Rockleigh, NJ, with a $7.5 million floor loan having been funded at closing. The property, which is currently occupied by the New York Times and a large German medical company, Fresnius, has approximately 60,000 square feet of vacant space and the borrowers can increase their loan amount up to a maximum level of $8.8 million when the balance of that space is leased. The floor loan amount equals approximately 80 percent of the purchase price and the ceiling loan amount is limited to 75 percent of the eventual value of the property.

The borrower has the option of floating the interest rate at prime minus .5 percent or at LIBOR plus 2.25 percent and, when the property's occupancy has stabilized, has an additional option to convert all or a portion of the debt to a fixed rate at a pre-determined spread over Treasury Constant Maturities. This financing instrument includes a 25-year amortization schedule and a 10-year term and is non-recourse to the borrowing entity. The loan is prepayable without penalty while the interest rate is floating and will convert to a predetermined sliding scale formula once the interest rate is fixed after the occupancy is stabilized. The lender charged a 1 percent fee for this creative financing vehicle and the loan can be assumed by a qualified buyer with a 1 percent transfer fee at time of sale.

The financing was arranged for a purchasing entity that includes some of the principals of Houlihan-Parnes Realtors and the loan was arranged with an American subsidiary of a foreign bank. The lender was represented by Hugh Finnegan, Esq. of Siller Wilk, while the borrower was represented by Mark Wasser of Goldberg, Weprin and Ustin.