$34,400,000 Non-Recourse Mixed-Use Retail and Office Refinance of a Leasehold Interest

Transaction Description:

George Smith Partners structured and arranged $45,600,000 in bridge financing for the recapitalization of the Lido Marina Village, a 116,000 sf multi-block, waterfront boutique retail and office property on Balboa Peninsula in Newport Beach. Lido Marina Village features retail, restaurant, and office space in 14 separate structures including prime waterfront retail and restaurant spaces featuring spectacular harbor views, along with 47 boat slips, creating an iconic Newport Beach destination. Some highlighted restaurants include Orange County’s only Nobu and Malibu Farm locations. Retail tenants include first-to-market “laid back luxe” retailers such as Elysse Walker, LoveShackFancy, Serena & Lily, the RealReal, and Jenni Kayne. The Property stretches from the waterfront, across a public street and walkway to the Via Lido street-front retail. It also includes a 372-space parking structure and 91 on-grade parking spaces. The Project is located on 17 legal parcels totaling 3.5 acres, with 4 parcels held as leasehold interests. Since the acquisition in 2013, the Sponsor successfully rebranded Lido Marketplace as a super high-quality boutique and restaurant destination, featuring a “who’s who” of tenants. Even during the pandemic, Lido Marina Village occupancy stayed high, and the Sponsor signed new leases at “high street” rents. The Property has been thriving in part due to their shoppers feeling comfortable in the open air, pedestrian friendly and waterfront environment.

Transaction Description: Shahin Yazdi successfully sourced the acquisition debt of four retail/office properties in Carmel, California, totaling 11 commercial units measuring 22,000 square feet. None of the occupants provide credit leases. One-third of the subject was vacant at close and at a 0.70 DCR, was unable to support operations or service debt. The asset was mismanaged to such an extent that there had been no reimbursable expenses collected over the prior 5 years. Several tenants were on month-to-month leases or leases set to expire before the end of this five-year loan term. The Borrower’s past operating and rehabilitation history allowed the lender to become comfortable with the business plan, and Mr. Yazdi structured a loan that suited both client and lender. Sized to 65% of the total project cost, the loan is variable for 5 years at WSJ Prime + 0.50% with a 4.50% floor and a lifetime cap of 7.50%. The loan is interest only for the first 2 years and amortizes thereafter on a 25 year amortization schedule. There is no prepayment penalty or cash management aspect. Property improvement and releasing funds are deposited into an account that is completely controlled by our Borrower, allowing them to reposition the property without any delays due to fund control restrictions. An 18 month interest reserve was posted by the Borrower in addition to his top-end 10% repayment guarantee.