Structured Financing: $10,000,000 Non-Recourse Cash-Out Refinance for Medical Office in Tertiary Virginia Market

Rate: 10 Year Swap + 2.00% (4.98% coupon)
Term: 10 Years Fixed
Amortization: 30 years
LTV: 70%
DCR: 1.25x
Lender Fee: Par
Guaranty: Non-Recourse
Prepayment Penalty: Defeasance

George Smith Partners successfully structured a $10,000,000 non-recourse, cash-out permanent loan secured by a 44,250 medical office building in a tertiary northern Virginia market outside of Washington D.C. In the current rising interest rate environment, the Sponsor’s goal was to lock-in a long term, low interest rate loan while freeing cash for other investment projects. Although the transaction was complicated by the lack of available market information, GSP sourced the loan with an experienced, sophisticated investment bank who not only became comfortable with the market, but also understood the asset quality together with the Sponsor’s operating experience and financial strength. GSP worked together with the lender to guide the first-time CMBS borrower through the comprehensive transaction process. Priced at 10-Year Swaps + 2.00% (4.98% coupon), the 10-year fixed rate loan sized to 70% of value with a 30-year amortization schedule, and a 1.25x debt coverage ratio.

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