Thorofare Capital has funded a $32.5 million floating rate commercial mortgage for the acquisition of Castleton Square & Commons. The Power Center totals 256,582 square feet, including 80%+ national credit tenants. Located on Castleton Corner Drive in Indianapolis, the property is adjacent to the I-465 Highway Exit, which results in strong visibility and high traffic counts given the infill location.

The sponsor sought a reliable financing solution after a Life Insurance Company lender was not able to fund prior to the contract deadline. With only 16 business days left to close on the purchase after an expired due diligence period, the sponsor approached Thorofare for certainty of execution, competitive proceeds and a flexible structure.

The property features strong national retailers including REI, Golfsmith, Dave & Busters, Haverty’s Furniture, Buffalo Wild Wings and DXL Casual Male. The property is set within one of the most prominent retail nodes in the Indianapolis market and Castleton Square Mall is set adjacent to the subject property on the east. Operated by Simon Property Group, Castleton Square Mall totals 1,383,000 square feet of Gross Leasable Area; key tenants at the mall include Macy’s, Von Maur, JCPenney, Sears, Dick’s Sporting Goods and AMC Theaters.

The sponsor was able to sign two new leases from the time of loan application to closing, displaying the strength of the demand in the market and the desirability of the properties to regional and national tenants. Although these new tenants were not in and paying rent at the time of closing, Thorofare underwrote this increased, imminent cash-flow to provide the sponsor with sufficient proceeds to close.

The non-recourse, interest-only financing was sized to 82% of total project capitalization. The floating rate loan carries an initial term of two years term, includes two, six-month extension options and was priced at a competitive spread over LIBOR. Additionally, Thorofare widened the interest rate cap strike price to a wider margin to help lower the total closing costs.

The sponsor is a Phoenix-based private real estate investment firm specializing in the acquisition and management of single-tenant and value-add, multi-tenant retail on a national basis. The Principals of the sponsor have been involved in various aspects of the real estate industry including the acquisition, leasing, financing, repositioning, and disposition of assets valued at over $1 billion.