Backing Business: Acquisition to Facilitate two 1031 Exchanges

An existing, long-time Commercial Real Estate customer approached First American Bank to assist with financing the acquisition of a 37,500-SF commercial building in the northwest Chicago suburbs, which was occupied by a 30+-year-old commercial business. There were a couple of unique aspects to this transaction. The buyer required a co-borrower structure made up of two Single Purpose Entities (SPEs) that were both investing funds from 1031 Exchanges. The seller and tenant shared ownership, looking to structure the deal as a sale/lease-back.

We provided financing with a 63% advance to allow for all of the necessary 1031 Exchange funds to be deposited toward the new acquisition. We also provided the co-borrowers with an interest rate swap for the transaction to help offset the floating rate risk of the commercial mortgage.

The longstanding, mutually successful relationship between the Missner Group and First American Bank allowed us to assist with getting the transaction over the finish line.