Thorofare Capital has funded a $6,500,000 floating rate commercial mortgage for the acquisition of the Apple Valley Office Campus, a 130,440 SF, 3-building office campus near Wright Patterson Air Force Base in Beavercreek, OH. The non-recourse financing structure included an initial term of three years with extensions, and was sized to 70% of the total project capitalization. Thorofare included approximately $1,600,000 in TI/LC reserves to support potential re-tenanting costs, as well as $100,000 to address immediate CapEx needs. The sponsor purchased the portfolio in an off-market transaction from an affiliate of a publicly traded, global investment management firm, who bought the non-performing note on the property and subsequently foreclosed to take title. The borrower intends to restructure/extend the leases with the two largest tenants (Northrop Grumman and MacAulay Brown) and then refinance the property with permanent debt.

The properties are located near the intersection of Research Blvd. and Grange Hall Road in the City of Beavercreek, which has no city income tax, unlike many of the surrounding municipalities. Beavercreek is the largest city in Greene County, Ohio and is the second largest suburb of Dayton. The property is comprised of three buildings – two are single-tenant and one is multi-tenant. Local market occupancy in the East Dayton submarket for comparable Class B office properties is strong, with demand in the submarket being driven heavily by military contracts related to Wright Patterson AFB. Apple Valley Office Center’s anchor tenants include Northrop Grumman Systems Corporation, a multi-billion dollar global defense and technology company, and MacAulay-Brown, a $100 million Dayton-based company. The campus, which includes more than 500 parking spaces for tenants and visitors, is easily accessible via Interstates 675, 75 and 70, as well as State Route 35.The occupancy, at the time of loan closing, ranged from 71% to 100% in each of the three buildings which translated into a double digit in-place debt yield.

Wright AFB is a US Air Force base located just east of Dayton, OH, it is the largest base of the US Air Force. The base’s key missions include the intertwined Air Force Life Cycle Management Center, National Air and Space Intelligence Center (undergoing a $29 million expansion), Air Force Research Laboratory and Air Force Institute of Technology. Employment has steadily grown since the 2005 Base Realignment and Closure and now supports about 27,000 jobs directly. The base also supports upwards of 25,000 additional private sector jobs outside the fence at contractors and other companies.

The sponsor group includes a partnership between two Southern California-based, privately held investment firms. The management team of the sponsor group has acquired in excess of $4 billion of real estate and real estate-related investments over the past 25 years, including 50,000 units of multi-family, 1.5 million square feet of retail, and 5 million square feet of office and industrial properties throughout the United States.