Question-and-Answer Session
Operator
Thank you. (Operator Instructions) Your first question comes from Carol Kemple - Hilliard Lyons.
Carol Kemple - Hilliard Lyons
In your 10-Q you talk about a recent acquisition of a warehouse property. What attracted you all to that acquisition?
Thomas A. Wentz Sr.
That was an UPREIT transaction that was accretive and required no cash to acquire.
Carol Kemple - Hilliard Lyons
Okay.
Thomas A. Wentz Sr.
And that’s part of our continuing focus on deploying our cash carefully, so we are aggressively seeking UPREIT transactions that are accretive. And that was one of those.
Carol Kemple - Hilliard Lyons
And what caused the rise in administrative expense during the quarter?
Thomas A. Wentz Jr.
Well, I think as we’ve indicated before, we are anticipating growth and we have been incurring some software and personnel costs in anticipation of that growth. And we are internalizing property management and so the expenses as we gear up to do that have caused administrative expenses to increase. But as we go forward we will be harvesting the revenues that formerly we’ve been paying to third party vendors.
Operator
Your next question comes from Christopher Lucas - Robert W. Baird & Co., Inc.
Christopher Lucas - Robert W. Baird & Co., Inc.
Tom, you’ve made some mention of recourse on loans. Can you describe the level of recourse on the mortgage loans?
Thomas A. Wentz Jr.
This is Tom Jr. I guess to answer that question, Chris, what we’re seeing on the bank financing side to the extent we’re exploring that as an option is a request for full recourse or a substantial portion of the loan, bringing the loan to value non-recourse portion down to maybe 50% or less. And that seems to really be a standard request out in the bank lending world. To the extent life companies are active in the market and are quoting IRET commercial projects, there has been some request for limited recourse but again it’s generally to cover the loan amount above a certain percentage level, 60 or 65%.
Christopher Lucas - Robert W. Baird & Co., Inc.
So in exchange for higher proceeds you would be providing some recourse?
Thomas A. Wentz Jr.
Well I think the answer to that on the bank side in exchange for any proceeds you’re going to be providing recourse. On the life company I think for higher leverage it’s clear if it’s available, the life companies are going to expect some level of recourse, whether it’s 10 or 15% of the loan amount. But at least at this point the bank lenders that IRET has been working with, it’s pretty much a universal request for total or near total recourse.
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