Versant Completes $32.5M Bridge Recapitalization of Met Center 15 in Austin

AUSTIN, TEXAS — Versant Commercial Brokerage Inc. has recapitalized the 256,000-square-foot Met Center 15 office building located in Austin. Versant assisted the tenant-in-common (TIC) investors by originating new senior debt and preferred equity, overseeing structural remediation and utilizing Internal Revenue Code Section 721 to roll up the TIC structure into a limited liability company on a tax-deferred basis. In 2010, the TIC owners discovered that there was a construction defect at the property. Expansive soils underneath the slab were causing the building to shift. At the same time, their loan was maturing and lenders were unwilling to refinance the property due to the construction defects. In addition, the owners did not have the financial resources to pay for the $4 million remediation cost. Versant designed a financing package to maximize returns for the TIC investors. With the assistance of Ethan Schelin of Landmark Capital Advisors, Versant originated new debt of $28 million and $4.5 million of preferred equity through Versant’s network of investors. The new sponsor is Virtua Partners, which also provided the loan guarantees.