How Zack/de Vito Architecture + Construction Bought a Commercial Building in San Francisco: The SBA 504 Loan for Small Business


As principals of Zack/de Vito Architecture + Construction, Jim Zack and his partner and wife, Lise de Vito, had a goal of purchasing commercial real estate for their firm. The challenge was that conventional commercial loans require 20-30% (or more) as a down payment – something that wasn’t possible for their small business, located San Francisco, CA, one of the world’s most expensive real estate markets. As Jim describes it, the game-changer was the Small Business Administration (SBA) 504 loan program due to one of the program’s most significant benefits – a 10% down-payment requirement.

An SBA 504 loan through TMC Financing (TMC) enabled Zack/de Vito to purchase a mixed-use property to stabilize monthly payments and build long-term financial security.

Zack/de Vito builds an international reputation from its San Francisco home

Jim, Lise, and the Zack/de Vito team are known worldwide for their award-winning residential and commercial projects, offering a full slate of services that includes architectural design (building and landscape), built-ins, furnishings, interior design, and more. Their work is featured in leading industry and lifestyle publications and is included in prestigious museum collections.

Still, when purchasing property, they experienced the same challenge that many small businesses face – how to save enough money to meet owner-equity requirements. Fortunately, they’d learned about the SBA 504 loan program early on.

“Conventional commercial loans require 20-30% or more as a down payment,” says Jim. “That’s hard for any small business owner to save, but it’s especially tough when your business is located in one of the most expensive cities for real estate. That’s why the SBA 504 loan’s 10% down-payment requirement is one of the best things about the program.”

The right opportunities: A mixed-use building and an SBA 504 loan through TMC Financing

Lise and Jim had leased commercial property for nearly two decades and had hoped to purchase that space, but the owners eventually declined to sell. When they leased another space, they did so explicitly with the option to purchase – and they knew that the SBA 504 loan program was the only viable financing option for them.

SBA 504 loans are made in partnership with business owners, Certified Development Companies (CDCs), like TMC Financing, and banks. For a typical SBA 504 loan project like Zack/de Vito’s, business owners contribute 10% of the total cost, an SBA loan administered by TMC Financing covers 40% and the partnering bank covers 50%. In addition, for an existing mixed-use building like this, 51% of the space must be used by the owner’s business, while the remainder can include uses such as owner-occupied residential space, income-producing apartments or leases to other businesses.

Jim and Lise learned about the SBA 504 loan program and TMC Financing from friends and colleagues who had successfully purchased commercial properties. He said that TMC Financing has a great reputation and he and Lise didn’t hesitate to move forward when the opportunity arose.

TMC Financing provides guidance, support and an SBA 504 loan

“The commercial real estate process is inherently complex and we experienced some additional delays due to the pandemic and other challenges. Our TMC team kept things moving along and they were always helpful and a pleasure to work with,” Jim says.

“We think of this investment as a savings account of sorts,” he says, adding that they have further financial benefits of rental income from the second-story space, which is currently set up as an apartment, as well as from tax benefits and the long-term equity they’ll build in San Francisco, where land is always at a premium.

Anna O Brien, TMC Financing’s Senior Vice President of business development, stated, “I am thrilled I could help Jim and Lise secure a 504 loan because of the incredible terms. Now, they have stability and peace of mind knowing that their monthly occupancy costs won’t change.”

An office today, an investment in tomorrow

Jim says that owning their building has given them the ability to refine long-term goals because they have a tangible asset that will gain value each year. His advice? “If you’re a small business owner and you don’t own your building yet, I really encourage you to look into the SBA 504 program, especially if you’ve been hesitating because you don’t think you can meet the down-payment requirement. You owe it to yourself to explore this – it really is a game-changer.”

To learn more, contact us today: TMC Financing is a non-profit CDC with a mission to promote economic development and job creation for small businesses in California, Nevada, and Arizona. Since 1981, TMC has secured more than $10 billion in SBA 504 commercial real estate financing for thousands of small businesses, and we can help you, too.