The $5.6M second mortgage development loan will go for the construction of an 81.4K square foot transitional care facility located on a major hospital campus in Phoenix. Construction is expected to be completed in about a year and GOOD will earn 9% interest during construction.
Prior to final completion, Gladstone has the right of first offer to purchase the property. Should it choose not to do so, it will receive an exit fee large enough to bring the IRR up to 22% when the development loan is repaid.
The loan is the first in a new program to participate with developers on build-to-suit projects.