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$3,037,500 Cash-Out Refinance for an Unanchored Multi-Tenant Shopping Center in Florissant, Missouri

Rate: 4.875%
Term: 5 year fixed
Amortization: 25 year amortization
LTV: 75%
DSCR: 1.25X
Prepayment: No prepayment penalty
Guarantee: Recourse
Lender Fee: Par
Free rate lock for 120 days

Transaction Description:

George Smith Partners successfully arranged $3,037,500 in a cash-out permanent refinance secured by an unanchored shopping center located in a tertiary market in Florissant, Missouri. The Property consists of 14 tenants, with a total rentable area of 133,330 SF.

The Property was 95% occupied at closing, but all of the leases will roll within the first four years of the loan term. In addition, the buildings were constructed in 1964, and sizable improvements have not been made since then.

GSP identified a capital provider who was comfortable offering a 5 year fixed rate loan instead of a short-term bridge loan, and able to size it at 75% of value and 1.25x Debt Service Covenant. The loan was structured with no holdback, upfront or on-going Tenant Improvements/Leasing Commission. Considering GSP’s strong relationship with the Lender and Sponsor’s sturdy track record, GSP negotiated a 120 day free rate lock while interest rates are pushing higher. The 75% leverage recourse loan has a fixed interest rate of 4.875% for 5 years, with a 25 year amortization.

Related Financings

  • $13,155,000 Non-Recourse Cash-Out Refinancing of a Retail Shopping Center; Orange County, CA

    October 23, 2019

    Transaction Description:
    George Smith Partners successfully arranged $13,155,000 in non-recourse bridge financing for a 20,000 sf shopping center in Orange County, CA. The Sponsor has invested over $10,000,000 in renovating the Property and it now it is currently 91% occupied.

    Challenge:
    The Subject Shopping Center has undergone significant reposition in tenant makeup and revenue. As of the date of funding the Center was 91% leased, but several of the tenants were in the process of building out their TIs and had not moved into the Property. Banks, insurance companies, CMBS lenders and credit unions requested more seasoning from our Sponsor. Debt funds and hard money lenders did not want to provide enough proceeds. The financing was too early for a perm lender who would want to see the seasoned cash-flow, and too late for most bridge lenders who would want to fund the actual construction and renovation without releasing cash out to the Sponsor.

    Solution:
    The Sponsor had many goals which included the reposition of the center, the sale of the center, and financing that allowed the Sponsor to pull cash out to sustain him during the sale process allowing him to receive back some of the value added to the Property. GSP was able to provide a solution for the Sponsor with a Midwest-based debt fund that allowed cash out for working capital of over $3,000,000 in less than 15 days. With GSP’s help, the Lender understood the ultimate value of the Property, was able to get comfortable with the large cash-out and give the Sponsor what they needed to complete the final stages of their plan and sell the Property.

    Rate: 8.9% fixed
    Term: 2 Years
    Amortization: Interest Only
    LTV: 80% / LTC: 90%
    Prepayment: None – 6 month minimum
    Guaranty: Non-Recourse

  • $41,000,000 in Permanent Financing for 187,000 SF, Shopping Center in Lakewood, CA

    July 17, 2019

    Transaction Description:

    George Smith Partners secured $41,000,000 in non-recourse debt to refinance an existing senior and mezzanine loan for a regional Southern California shopping center. The Property is 187,000 square foot center; 100% occupied, with anchor tenants Hobby Lobby and Michaels. GSP worked with the lender to assuage B-Piece buyer concerns of the anchor tenant’s termination risk. Loan proceeds repaid the existing senior and mezzanine loans, covered closing costs, and provided a return of equity to the Sponsor. The financing is a 10 year full term interest only loan that maximizes cash flow for the Sponsor. The non-recourse fixed-rate loan priced at 1.57% over the 10-year Treasury that had a floor of 2.40% at application.

    Rate: 3.97% Fixed for Entire Term
    Term: 10 Years
    Amortization: Full-Term Interest Only
    Loan-to-Value: 65%
    Guarantee: Non-Recourse
    Lender Fee: Par
    Prepayment: Defeasance

  • $101,300,000 in Financing for 375,000 SF, 37-Acre Shopping Center in La Habra, CA

    March 27, 2019

    Transaction Description:

    George Smith Partners secured $101,300,000 in non-recourse bridge debt to refinance out an existing senior loan and mezzanine loan for a regional Southern California shopping center. The Property is a 373,000 square foot open-air, dual grocery anchored shopping center currently midway through a center-wide reposition. The Property is 96% leased but requires additional funds to complete the stabilization, including the construction of a new pre-leased pad building. The Center required a major leasing and re-leasing effort to modernize the 37 acre site into a true lifestyle center. Loan proceeds repaid the existing financing, covered closing costs, and will fund 100% of future CapEx, tenant improvement, and leasing commission costs associated with stabilizing the Property. The loan offers a 24-month initial term plus three extension options with durations of one year each, which provide the Borrower maximum flexibility. The non-recourse floating-rate loan priced at 3.20% over One-Month LIBOR and offered full term interest only payments.

     

    Rate: One-Month LIBOR + 3.20%
    Term: Two years plus three, one-year extension options
    Amortization: Full-term interest only
    Loan to Initial Value: 75%
    Loan to Stable Value: 70%
    Guaranty: Non-recourse
    Lender Fee: 0.75%
    Prepayment: 15-month spread maintenance

  • $1,295,000 Cash-Out Permanent Financing for a 73% Occupied Multi-Tenant Shopping Center

    May 2, 2018

    George Smith Partners successfully arranged $1,295,000 in cash-out permanent refinance secured by a 10,047 SF, 10-tenant shopping center.

    The property is currently 73% occupied with short term leases, and tenants are non-credit local businesses. GSP identified a capital provider that provided a free rate lock at signing of the LOI for 90 days, was comfortable with the local retail market, and the possibility for potential tenants to execute new leases. Fixed for 3 years at 4.5%, the loan amortizes over 25 years with no prepayment penalty.

    Rate: 4.5%
    Term: 3 year fixed rate loan
    Amortization: 25 years
    Loan to Value: 70%
    DSCR: 1.25X
    Guarantee: Recourse
    Prepayment Penalty: None
    Lender Fee: Par
    TI/LC Reserves: No upfront TI/LC holdbacks and on-going reserves