Marc Tropp, a senior managing director at Eastern Union, has successfully secured $13,297,000 in financing for the construction of a four-story self-storage facility with 931 units located at 80 Barber Ave. in Worcester, MA. The facility will be managed by CubeSmart.
The financing agreement allows for up to 65% of the total project cost to be covered. During the initial construction and lease-up period of 36 months, interest will accrue at a rate that is equivalent to 300 basis points above SOFR (Secured Overnight Financing Rate). The borrower is responsible for making interest-only payments during this time.
Originally faced with delays from their previous lender – a local bank – which ultimately resulted in being unable to provide funding after nine months of waiting; Eastern Union was able to secure financing from another local community bank within just two months.
Following the construction phase, there will be an additional five-year term loan available at an initial interest rate set at 300 basis points above FHLB (Federal Home Loan Bank) rates. In year six and beyond until completion of the second five-year term loan period; this rate will reset based on current FHLB rates plus an additional margin increase also set at 300 basis points over those same rates each year thereafter until fully repaid over thirty years through amortization payments.
