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Santa Clara Portfolio

Silicon Valley Industrial

$20,700,000 Acquisition Financing

Santa Clara, CA | December 2021

The collateral, which was acquired by the loan borrower in an off-market transaction from two unrelated sellers, includes five (5) buildings that were 100% occupied at the time of loan origination.

Due to the high barriers to entry and strategic location, the submarket vacancy is low with diminishing supply of available industrial product coupled with the recent repurposing of other prior industrial sites into residential uses.

Upon acquisition, the sponsor’s primary business plan is to secure entitlements for data center usage and ultimately build two data centers totaling approximately 200,000 SF and a 49 MW substation. Santa Clara is home to some of the most prominent tech companies in the world, which are attracted to the city because of the ease of doing business and because Silicon Valley Power, the city-owned electrical utility, provides power at rates approximately 35% less than other Silicon Valley cities that are tied to the PG&E grid.

The floating-rate, interest-only loan carries an initial term of two years, with flexible prepayment optionality and a competitively priced spread over. The structure includes an extension option subject to performance tests.

The sponsorship is a joint venture of an institutionally backed private equity real estate fund operator and a national property development firm headquartered in Minnesota with offices in California and North Carolina.

They have developed more than 550 projects valued at more than $4 billion and spanning 25 million square feet throughout 39 states and parts of Canada.

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