Retail

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    $11,800,000 Non-Recourse Cash-Out Refinance of a Multi-Tenant Retail Center

    January 10, 2018

    George Smith Partners successfully arranged the $11,800,000 non-recourse cash-out refinance secured by a 49,942 square foot multi-tenant retail center in Tarzana, California. GSP identified a capital provider who was comfortable with the return of equity given the Sponsor’s team and experience. Sized to 55% of appraised value, 8.75% Debt Yield, and a 1.65x Proforma DSCR. The 10-year interest only note is fixed at 2.25% over the LIBOR 10 Year SWAP rate (4.62% at closing).

    Rate: SWAP + 2.25% (4.62% at closing)
    Term: 10 Years
    Amortization: Interest Only
    LTV: 55%
    Guarantee: Non-Recourse

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    $17,800,000 Non-Recourse Bridge Loan to Stabilize a 60,500 sf Retail Shopping Center

    January 10, 2018

    George Smith Partners secured $17,800,000 of non-recourse bridge debt to refinance the Home Ranch Shopping Center, a 60,500 square foot multi-tenant retail shopping center in Yorba Linda, California. Of the total financing, the lender provided $13,700,000 in initial funding and $4,100,000 in future funding to pay for tenant improvements and leasing commissions. Pre-leasing activity increased significantly during due diligence and the Sponsor was able to bring the executed leasing from 56% to 97%. Once stabilized, the business plan will be to refinance into a CMBS takeout. GSP was able to source a Bridge Capital Provider to get comfortable with refinancing out another bridge loan as well as allocating a favorable basis for the Sponsor by adding in costs invested to-date since the initial purchase. Our Sponsor requested a return of equity upon completion of their business plan and preferred a new capital provider who would provide these funds at a lower fixed rate cost.

    Rate: L+600
    Term: 18 Months + One 6 Mo. Extension
    Amortization: IO
    LTC: 75%
    LTV: 60%
    Prepayment: 6 Mo. Minimum Interest
    Guarantee: Non-Recourse

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    $4,520,000 Non-Recourse Shopping Center Refinance in Birmingham, Alabama

    December 20, 2017

    George Smith Partners secured $4,520,000 funding to refinance a 110,000 sf multi-tenant retail shopping center located in a tertiary market, Center Point, Alabama. The center did not have any credit tenants; the largest tenants were Dollar Tree, Family Dollar and a regional furniture store. GSP was able to show lenders that these tenants were appropriate for the surrounding demographics. The 2.45% fixed coupon loan is sized to 9.0% debt yield and the 10-year term is fixed with a 30-year amortization schedule thereafter.

    Term: 10 Year Fixed
    Rate: 10 Year Treasury + 230
    Amortization: 30 Years
    LTV: 70%
    Guarantee: Non-Recourse

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    $6,515,000 Unanchored Shopping Center Permanent Refinancing

    November 8, 2017

    GSP successfully arranged $6,515,000 for the refinance of a 21-tenant unanchored retail center in a Southwestern MSA. The property was 85% occupied at the time of closing. GSP identified a lender who is comfortable with the sponsor’s market experience and the property’s leasing potential. Sized to 75% of value, the recourse loan is fixed for 15 years at 4%.

    Rate: 4.00%
    Term: 15 year fixed rate loan
    Amortization: 15 years
    LTV: 75%
    DSCR: 1.25x (underwritten based on the in-place income)
    Prepayment: No prepayment penalty
    Lender Fee: Par
    Guarantee: Recourse

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    $3,500,000 Acquisition Financing for Texas Single Tenant Triple Net Asset

    October 25, 2017

    George Smith Partners successfully arranged $3,500,000 acquisition financing of a single tenant triple net asset located near Austin, Texas. The in-place retailer is a well-known regional auto body repair shop who recently signed a lease and occupied the space. It was crucial to identify a lender who could be aggressive for a Sponsor with limited net worth and liquidity. Fixed for 10 years at 4.50%, the recourse loan was sized to 75% of the total capitalization with no prepayment penalty. Previously financed by a 100% loan to cost construction loan, the subject property had recently been completed and occupied. GSP worked closely with the investment sales broker to assist in supporting the asset value to our niche lender.

    Rate: 4.50%
    Term: 10 year fixed
    Amortization: 30-year amortization
    Loan to Value: 75%
    Prepayment: None

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    $4,550,000 Refinance/Discounted Payoff for a Multi-Tenant Shadow Anchored Retail Center

    October 11, 2017

    George Smith Partners secured a $4,550,000 bridge loan to refinance a 2007 constructed, distressed 25,000 square foot shadow anchored shopping center in the Inland Empire. The CMBS note was purchased at a discount during the recession and the note buyer agreed to a discounted payoff with the borrower. The largest tenant vacated prior to loan maturity which added another level of complexity to the transaction. George Smith Partners sourced a Lender experienced with this location, comfortable with Sponsor’s financial strength, track record and guarantee. Our Sponsor was not required to invest additional cash into the transaction.  The new loan included an interest reserve as well as funds for leasing commissions, tenant improvements and no prepayment penalty.

    Rate: Confidential
    Term: 12 months plus extensions
    Amortization: Interest Only
    LTV: 75%
    Guarantee: Recourse
    Origination Fee: 1.00%

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    $9,730,000 Shadow Anchored Retail Acquisition Financing

    September 27, 2017

    Transaction Description:
    George Smith Partners secured $9,730,000 acquisition financing for a 56,747 square foot shadow anchored retail center that was 70% occupied at the close of escrow. Shadow anchored by Home Depot and Fry’s Food & Drug, the 14-tenant shopping center is located in a Southwestern MSA. Fixed at 4.2% for ten years, the loan amortizes over 25 years and does not carry a prepayment penalty.

    Challenges:
    During due diligence, a tenant representing 27% of the net rentable area terminated their lease bringing occupancy to 70%. Our Sponsors required a permanent loan execution and would not consider a bridge to perm option.

    Solutions:
    GSP identified a lending source who was knowledgeable about the strength of this sub-market and comfortable with 30% vacancy. They identified the upside potential and rental opportunities in the local market. Our Sponsor’s considerable investment track record and financial strength further solidified the loan strength and allowed for a permanent loan instead of a bridge loan.

    Rate: 4.2%
    Term: 10 year fixed rate loan
    Amortization: 25 years
    LTV: 69%
    Prepayment: None
    Guarantee: Recourse

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    80% Loan-to-Value, $11,250,000 Refinance of a 44% Occupied Retail Center Shadow Anchored by an Independent Grocery Chain

    August 16, 2017

    Transaction Description:
    GSP successfully placed $11,250,000 in non-recourse, floating-rate bridge debt on a 44% occupied, but 97% leased, 1960’s vintage Salt Lake City metro multi-tenant retail property. Although the property was only 44% physically occupied at loan application as a result of a planned re-tenanting program, the borrower recently executed two leases with large-format retailers that will bring occupancy to 97%. GSP identified a lender comfortable with the story behind the property’s 1) low physical occupancy at time of application, 2) grocery shadow anchor, 3) temporary tenants paying below-market rent during transition period, and 4) lack of supporting sale comps for the market. The short-term bridge loan was sized to 80% of as-is value, 75% of stable value, and included future funding to cover 100% of lease-up costs with interest not paid on unfunded proceeds until drawn.

    Rate: 30-Day LIBOR + 4.75%
    Term: 24-month initial term plus two 12-month extension options
    Amort: Interest only (initial term)
    LTV: 80% as-is, 75% as-stable
    Prepayment: 15-month spread maintenance
    Lender Fee: 1%
    Guaranty: Non-Recourse

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    $17,300,000 Rite Aid Portfolio Refinance

    July 26, 2017

    George Smith Partners placed the rate and term refinance of four stand-alone Rite Aid Drug Stores.  The loans are structured as four separate un-crossed loans to maintain reposition flexibility.  At the time of loan commitment, the Walgreens/Rite Aid merger was still under consideration by the FTC and it was unknown if Walgreens would close any of the subject units.  Our Sponsor wanted to maintain options and not to allow one store closure to negatively affect the remaining portfolio.  Store sales were not available.  Each lease has approximately 9.5 years remaining on the initial term.  The balance sheet loan is coterminous with the lease term and does not carry the traditional two-year lease hang-out.  No reserve structure is required prior to the tenant notice date, six months before the lease and subsequent loan expiration.  Fixed at 4.52% for five years, the rate will float over LIBOR for the remaining loan term and amortizes over 30 years.  Prepayment steps down allowing for additional reposition flexibly if needed.

    Loans: Four Stand-Alone Uncrossed Loans
    Rate: 4.52% Fixed for Five Years
    Term: 9.5 Years
    Amortization: 30 Years
    LTV: 50%
    Lender Fee: ½ point
    Prepayment: 5,4,3,2,1, open
    TI/LC Reserves: None

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    5 Day Close $3,000,000 Non-Recourse Bridge Loan on Fire Damaged Downtown LA Retail Property

    July 12, 2017

    Transaction Description
    George Smith Partners secured a $3,000,000 non-recourse bridge loan to demolish and begin the redevelopment of a fire damaged retail building on a prime corner in Downtown Los Angeles. After the fire, the sponsor decided to demolish and rezone the property. The long term plan is to redevelop the property into a mixed use building with ground floor retail, office, and condos. GSP used its experience and relationships to identify a private money lender who could understand the greater value of the project and was able to demonstrate both the inherent value of the property due to its extraordinary location as well as the future value of the project as completed. The lender was able to close in 5 days. The interest only loan is priced at 7.99% and represents 55% of the property’s current value. The loan has a 1-year term with a 1-year extension option and no prepayment penalty.

    Rate: 7.99%
    Term: 1 Year with a 1 Year Extension
    Amortization: Interest Only
    Guaranty: Non-Recourse
    Prepayment Penalty: None
    LTV: 55%

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    $5,275,000 Non-Recourse, Non-CMBS Permanent Loan Fixed for Seven Years

    June 14, 2017

    George Smith Partners successfully arranged a $5,275,000 non-recourse, 7-year fixed rate, non-CMBS loan for a non-anchored retail center in Imperial Beach, CA.  While the property is 100% occupied in a coastal California location, the Sponsor needed a non-recourse loan with a flexible prepayment penalty on a long-term fixed rate basis which is extremely hard to locate outside of CMBS. Life insurance companies were not able to get comfortable with the collateral since the largest tenant was a is a non-credit gym and there is significant near-term lease roll. Other bank lenders would not provide full credit for the significant cell tower income which limited their loan proceeds. GSP was able to identify a typically recourse lender that was willing to provide a non-recourse loan on this property and was able to underwrite the full cell tower income.

    Rate: 4.65%
    Term: 10-year term fixed for 7 years
    Loan to Value: 50%
    Prepayment Penalty: 5%, 4%, 3%, 2%, 1%
    Loan Fee: Par
    Guaranty: Non-Recourse

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    $3,700,000 Refinance for “Single Tenant” Subleased Retail Property in Mid-Atlantic Secondary Location

    June 7, 2017

    George Smith Partners arranged a $3,700,000 loan for a non-credit tenant that subleases a significant portion of the space.  The tenant is a middle market grocery chain recently acquired by a hedge fund.   The formerly public company is now private with no financials available.  The 31,000 square foot grocery store tenant subleases 8,000 square feet to an office supply store.  The challenge was finding a lender that could be comfortable with 8 years left on the lease (and the co-terminus sublease) in a secondary location with no continuing sales available.  GSP sourced a lender with local expertise that got comfortable with the historic sales that were reported prior to the tenant’s acquisition.   The short amortization and recourse were also risk mitigates.

    Rate: 4.25% Fixed
    Term: 5 years
    Amortization: 15 years
    Guaranty: Full Recourse
    Lender Fee: 0.30%