Rate: 4.23%, Fixed
Term: 10 Years
Amortization: 30 Years
Lender Fee: Par
George Smith Partners arranged $17,882,000 for the refinance of a 332-unit garden-style apartment complex located in Albuquerque, New Mexico. GSP identified a capital provider that would accommodate the existing borrower structure, which was comprised of 7 TIC’s (Tenants-in-Common). Our Sponsor wanted to keep the existing organization structure in place due to potential tax implications that may have arisen with any changes. The Sponsor’s existing loan had a floating interest rate, which they wanted to convert to a fixed rate to eliminate any interest rate risk. Sized to 70% of value, the non-recourse loan is fixed at 4.23% with a 10-year term and a 30-year amortization schedule.
Senior Vice President
Assistant Vice President
$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.
$11,500,000 Non-Recourse Refinance of a Recently Stabilized Los Angeles County Shopping Center Anchored by a National Discount Retailer and Shadow Anchored by a Regional Grocer
June 7, 2017
George Smith Partners successfully placed $11,500,000 of non-recourse, ten-year fixed rate first mortgage debt for the refinance of a 60,000 square foot multi-tenant retail property anchored by an investment grade rated discount retailer and shadow anchored by a successful regional ethnic grocer. The property was 99% leased at loan closing, but only 79% occupied as three new tenants were in a four month build out and free rent period. GSP worked with the lender to avoid a capitalized hold back of over $2,000,000 as the new tenants’ income was included in the underwritten income, but was not being collected yet. Instead GSP negotiated a structured a nominal six month rent and expense reserve held back at closing and released pro rata to Sponsor as the new tenants open for business.
The lender became comfortable with this structure due to a combination of positive factors including a having a highly experienced sponsor, strong shadow anchor sales, below market rent for the anchor tenant with fixed low renewal rates, and a rent roll with over 50% investment grade rated tenancy. The 4.59% fixed coupon loan is sized to an 8.0% debt yield and 1.25x debt coverage ratio and the 10-year term is interest only for the first five years, with a 30-year amortization schedule thereafter.