$2,650,000 Refinance in Gilroy, CA
Rubicon Mortgage Fund, LLC Closes $2.65 Million Commercial Real Estate Refinance
for Gilroy Retail Center
Loan Amount: $2,650,000
Loan Term: 12 Months
LTV: Under 60%
Lien Position: 1st Deed of Trust
In a strategic commercial real estate refinance transaction, Rubicon Mortgage Fund, LLC has successfully closed a $2,650,000 refinance loan for a 13,544 square foot retail strip center in Gilroy, California. This transaction demonstrates the continued strength of the commercial lending market and highlights effective solutions for property owners facing loan maturity challenges.
Strategic Commercial Real Estate Refinance Solution
The commercial real estate refinance was structured as a straight refinance with no cash-out component, designed specifically to address the maturity of the borrower’s existing first position loan. With the current loan in maturity default, the property owner needed a reliable financing partner to prevent potential foreclosure and provide breathing room for their planned exit strategy.
What makes this commercial real estate refinance particularly noteworthy is the cooperation of the second position lender, who agreed to subordinate their note to Rubicon Mortgage Fund’s new first position loan. This collaborative approach enabled a seamless transition and protected all parties’ interests while resolving the default situation.
Prime Gilroy Location with Strong Retail Fundamentals
High-Visibility Retail Corridor
The retail strip center benefits from an exceptional location along a strong retail corridor in Gilroy, California. Surrounded by major national retailers and highly visible from the highway, the property enjoys consistent traffic flow and strong market fundamentals that support its long-term value proposition.
This newer construction retail center represents the type of institutional-quality asset that attracts both tenants and investors in the competitive commercial real estate market. The property’s proximity to established retail anchors provides natural traffic generation and cross-shopping opportunities for its tenant base.
Stable Tenant Profile
Currently, three of the four retail units are occupied, with one long-term tenant providing stable cash flow. The property features an anchor tenant that significantly enhances its marketability and stability.
The landlord is actively renovating the largest unit to accommodate a restaurant tenant, demonstrating ongoing property management and value-add initiatives that should enhance the center’s appeal and rental income potential.
Why This Commercial Real Estate Refinance Made Sense
Addressing Loan Maturity and Default
When commercial property loans mature, owners must either pay off the existing lender, most commonly through cash proceeds, sale of the property, or a refinance. In this case, the borrower’s first position loan had reached maturity and fallen into default, creating an urgent need for a commercial real estate refinance solution. Rubicon Mortgage Fund, LLC stepped in to provide the necessary capital to refinance the existing first position lender and cure the default.
Clear Exit Strategy
The borrower’s planned exit strategy involves selling the building within approximately one year. This commercial real estate refinance provides a bridge to that sale, allowing time to complete the restaurant tenant buildout, stabilize the property’s income, and position it for maximum value at sale. With improving occupancy and a strong location, the property should attract significant buyer interest when brought to market.
Benefits of Working with Specialized Commercial Lenders
This transaction illustrates the value of working with experienced commercial real estate lenders who understand the complexities of retail property financing. Rubicon’s expertise allowed them to:
- Move quickly to cure the loan default and prevent foreclosure
- Structure creative solutions involving subordination agreements
- Underwrite based on property quality and location, not just current occupancy
- Provide bridge financing aligned with the owner’s exit timeline
Conclusion: Commercial Real Estate Refinance as a Strategic Tool
The successful closing of this $2.65 million commercial real estate refinance demonstrates how strategic refinancing can solve complex property ownership challenges. For the Gilroy retail center owner, this transaction provided relief from a maturing loan while preserving their ability to maximize value through an orderly sale process.
As commercial real estate markets continue to evolve, property owners facing loan maturity or default situations should explore refinance options with experienced lenders who can structure creative solutions. Whether addressing defaults, timing a property sale, or repositioning assets, having a relationship with a local lender remains a powerful tool in an investor’s toolkit.
For more information about commercial real estate refinance solutions for retail properties and other commercial assets, contact Rubicon Mortgage Fund, LLC to discuss your financing needs.
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