NHP bank has orignated a $70 million convertible mortgage to fund a pruchase of a $100 million medical office building. The mortgage has a fixed interest rate of 7% for 25 years (payable monthly). The loan gives the lender the option to convert the cortgage balance into a 50% equity position at the end of year 5. That is, instead of receiving the payoff on the mortgage, the lender would own 50% of the property. The property is projected to increase 6% per year over a five-year holding period. What is the lender's IRR on this loan?

A) 7.0%

B) 7.73%

C) 6.5%

D) None of the above