Company overview
Harborview Logistics Center is a three-building industrial park with 1.05 million square feet of warehouse and distribution space, about 20 miles from a large inland port in the Midwest. Calder Industrial Partners, a regional real estate investor, bought it in 2022 for $112M with $40M of equity. Occupancy has fallen from 96% to 79% since then: a 140,000 sq ft tenant left in 2025 and two smaller units emptied as leases expired.
Calder's business plan is to re-lease the vacant space at today's higher market rents, mark expiring leases up to market, and refinance into a long-term fixed-rate loan once the property is stabilized. It is asking for an $86M floating-rate bridge loan: $76.5M funded at closing to repay the existing $72M loan and fund closing costs and an interest reserve, plus $9.5M of future funding for tenant improvements and leasing commissions (TI/LC), drawn as new leases are signed.
The largest tenant, Ridgeway Freight, a third-party logistics company, leases 190,000 sq ft (about a fifth of in-place rent) on a lease that expires in March 2027, inside the loan term. Ridgeway has not said whether it will renew.
The IC question: is the lease-up plan achievable in this market, does the loan work while the property is half-way through it, and will the stabilized property support a refinance large enough to repay the bridge?
Your memo should answer
- 01Would you make this loan? State your recommendation and the conditions or changes you would require.
- 02What are the two or three biggest risks to the business plan and to repayment?
- 03Calculate in-place and stabilized debt yield, loan-to-value (as-is and stabilized) and interest coverage at SOFR of 4.0% and at the cap strike. Build your own stabilized NOI rather than using the sponsor's.
- 04Build a downside case: the lease-up stalls and cap rates rise. What happens to coverage, value, loan-to-value and the refinance at maturity?
- 05Do the structure and terms (future funding, reserves, rate cap, extension tests, cash sweep, guarantees) protect the lender? What would you change?
Financials ($M)
| FY2023 | FY2024 | FY2025 | LTM Jun-26 | |
|---|---|---|---|---|
| Rentable area (000 sq ft) | 1050 | 1050 | 1050 | 1050 |
| Occupancy | 96% | 93% | 81% | 79% |
| In-place rent ($/sq ft, NNN) | 6.40 | 6.60 | 6.85 | 6.95 |
| Base rent | 6.45 | 6.44 | 5.83 | 5.77 |
| Unrecovered operating expenses | 0.35 | 0.40 | 0.62 | 0.66 |
| Net operating income | 6.10 | 6.04 | 5.21 | 5.11 |
| Capex, TI and leasing costs | 0.6 | 0.9 | 1.4 | 1.5 |
Term sheet
- Facility
- $86.0M floating-rate first mortgage loan: $76.5M funded at closing; $9.5M future funding for TI/LC, drawn lease by lease against signed leases
- Uses at closing
- Repay existing loan $72.0M; closing costs $1.5M; interest reserve $3.0M
- Term
- 3-year initial term plus two 1-year extensions at the borrower's option
- Pricing
- SOFR + 340 bp; 1.0% origination fee; 0.5% exit fee
- Rate cap
- Borrower buys a SOFR cap struck at 4.50% for the initial term; a new cap is needed for each extension
- Extension tests
- No default; debt yield of at least 8.0% on the full $86.0M loan; new rate cap; 0.25% extension fee
- Cash management
- Cash sweep from month 18 if debt yield on the funded balance is below 7.0%
- Recourse
- Non-recourse with standard carve-outs (fraud, misapplied funds, bankruptcy); Calder guarantees completion of the TI work it starts; no carry or interest guarantee
- Appraisal
- As-is value $118.0M (July 2026); stabilized value $148.0M on $7.4M NOI at a 5.00% cap rate
- Pricing context
- Recent industrial bridge loans: SOFR + 300 to 375 bp, 65% to 75% loan-to-value, initial debt yields of 6% to 8%
Rent roll summary (occupied space, June 30, 2026)
- Ridgeway Freight (3PL)
- 190,000 sq ft · $6.20/sq ft · expires Mar 2027 · 20% of in-place rent
- Pellham Home Goods
- 140,000 sq ft · $7.10/sq ft · expires Jun 2029
- Northline Auto Parts
- 95,000 sq ft · $7.40/sq ft · expires Sep 2030
- 11 smaller tenants
- 404,500 sq ft · $7.14/sq ft average · expiries spread 2026–2031
- Total occupied
- 829,500 sq ft · $6.95/sq ft average · $5.77M base rent
- Lease expiries (% of occupied sq ft)
- 2026: 4% · 2027: 29% · 2028: 12% · 2029: 21% · 2030 and later: 34%
- Vacant
- 220,500 sq ft in two units (140,000 and 80,500 sq ft)
Business plan and market (sponsor plan and broker data)
- Sponsor plan
- Lease the vacant space within 24 months at $8.50/sq ft; mark expiring leases to $8.50; stabilize at 97% occupancy; stabilized NOI $7.6M
- Broker opinion of market rent
- $7.90 to $8.30/sq ft NNN for 80,000–150,000 sq ft units (midpoint $8.10)
- Submarket vacancy
- 9.5% (4.0% in 2023); 6.2M sq ft of new space delivered in 2025–26
- Typical lease-up
- 11 to 14 months for units over 100,000 sq ft; 4 to 6 months free rent on new 5–7 year leases
- TI/LC budget
- $9.5M, about $43 per vacant sq ft
- Unrecovered expenses at 95% occupancy
- About $0.25M a year (landlord pays its share of taxes, insurance and maintenance on vacant space)
Valuation and capital markets (July 2026)
- Recent submarket sales
- Cap rates of 5.25% to 6.25% on stabilized multi-tenant industrial
- Permanent loan terms
- Life companies and CMBS lend up to 60% loan-to-value at a minimum 9.0% debt yield on stabilized property
- Rates
- SOFR 4.0%; 10-year Treasury 4.3%