Luken Holdings has completed a deal with Wells Fargo that will allow it to refinance more $28 million in loans, according to Lynda Childress, the real estate company's president and CEO.
The deal covers refinancing on the downtown Tallan and Krystal buildings, as well as the Union Square parking garage and Riverside Drive property, she said.
"It's signed, it's completed, it's done," Ms. Childress said.
Henry Luken, who bought the properties from former mayor and now-Sen. Bob Corker in 2006, is pleased with the deal.
"I'm very happy its over with. It happened during a horrible time for everyone, and we're glad to move on to the next stage," he said.
GE Capital called Luken's existing loans in June 2009, and although Luken was able to secure two six-month extensions, those were set to run out in June.
"Although we were never late with payments, because of the market there weren't a lot of people letting go of a lot of money," Ms. Childress said. "We were technically in event of default."
Luken refinanced the Tennessee American Water Co. building downtown in September through Kansas City Life Insurance Co. for just under $2 million, but was unable to find a financial partner for the other properties until it discovered Wells Fargo in November.
"They wanted to see every room, every crack and crevice," she said of the appraisal process.
But in the end, she said, it was worth it.
"They thought we as the management company were doing a very good job, so we entered into a loan commitment with them in December," Ms. Childress said.
Jay Oglesby, senior vice president for middle-market real estate at Wells Fargo, said the deal was the first of what he hoped will be many more.
"It's great to be able to get some business done there in Chattanooga, and to be able to do it with a group with as high a profile as Luken Holdings," Mr. Oglesby said.
Despite the wavering financial markets, Wells Fargo is aggressively seeking to make loans in what it sees as a growth market, he said. The purchase of Wachovia in 2008 has helped the company expand into regions here it formerly had less presence, he added.
"We're under definite orders to go out there and make new loans," Mr. Oglesby said. "We have a very strong balance sheet. We've been very conservative in the past, so we have the strength to continue to make loans today."
Tallan Financial building
* 151,000 square feet
* 12 stories
* Built in 1982
* Three elevators
* Major tenants: Joseph Decosimo and Co., Merrill Lynch, Regions Bank, Chambliss, Bahner & Stophel law firm
The Krystal building
* 138,000 square feet
* 10 stories, plus basement
* Built in 1979
* Three elevators
* Major tenants: Krystal Co., Morgan Keegan, UBS, Petty & Landis, AGA