Rate: LIBOR + 3.75%
Term: 36 months with a 12 month extension
Amortization: Interest Only
LTC: 70%
LTV: 62% of as-is value
Guarantee: Recourse
Prepayment Penalty: 1.0% for first 12 months, 0.5% for next 12 months, open thereafter
George Smith Partners secured $38,750,000 of acquisition financing for the purchase of a retail assemblage in West Hollywood, CA. The Assemblage is currently 100% occupied on month-to-month leases and provides sufficient cash flow to cover all operating and debt service costs. The Sponsor purchased the property with plans to entitle for a mixed-use project which would include condos and a hotel. The lender was able to get comfortable with the entitlement risk due to the Sponsor’s strong track record in the market, the irreplaceable location, and the ability to generate significant additional revenue through already approved billboards. The recourse loan was sized to 62% of as-is LTV, 70% LTC, and is priced at LIBOR + 3.75%. The financing has a 3-year term with a 1-year extension and a stepdown prepayment.
Advisors
Related Financings
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$9,327,000 Acquisition Financing for Retail Portfolio; Multistate
May 24, 2023
Transaction Description:
George Smith Partners successfully arranged $9,327,000 in acquisition financing for the purchase of three prime retail properties adjacent to top colleges across different states. The properties are all performing very well but do not have credit tenants. Overcoming the reluctance of regional banks to cross-collateralize and the high rates offered by many lenders, we sourced a national bank that could loan on all three properties. The lender provided a seven-year fixed rate term and 4 years of Interest Only payments. The strategic placement of these properties in prime locations is expected to drive significant value appreciation. By structuring the loans with low leverage, we allowed the Sponsor to complete a 1031 exchange. The cross-collateralized loan with release provisions allowed the seamless acquisition of the assets.
Rate: Fixed at 6.01% for 7 years
Interest Only: 4 Years
LTV: 50%
Guaranty: Non-Recourse- Advisors: Matthew Kirisits
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$14,100,000 Permanent Acquisition Financing for High Street Retail Property; Chicago, IL
April 19, 2023
Transaction Description:
George Smith Partners secured $14,100,000 in permanent financing for the acquisition of a 5,666 square-foot luxury, high-street retail property located at 909 N. Michigan Avenue, in the heart of Chicago’s Magnificent Mile Shopping District. The three luxury retail tenants include Bulgari, Omega Watches, and Chicago’s own Burdeen’s Jewelry. The Sponsor purchased the retail parcel from the owner of the Westin Michigan Avenue Chicago for $27,300,000, approximately $4,818 per square foot.
During the closing process, the capital markets experienced considerable volatility with the fallout from Silicon Valley Bank and First Republic Bank causing a seismic shift to the debt markets prior to funding of the loan. George Smith Partners was able to hold proceeds on the loan and closed the 5-year fixed rate note with full-term interest only by leveraging our lender relationships and augmenting with appropriate structure.
Rate: 6.75% Fixed (Index + 2.77%)
Term: 5 Years
Interest-Only: Full Term
LTV: 50%
Debt Yield: 15%
Guaranty: Non-Recourse -
$4,150,000 Acquisition Financing for Multi-Tenant Retail Center; Charlotte, SC
March 22, 2023
Transaction Description:
George Smith Partners arranged $4,150,000 in fixed-rate acquisition financing for a 100% occupied, 12,558 square foot, 4-tenant, Starbucks-anchored retail center in South Carolina. Located just across the border from North Carolina in suburban Charlotte. The contemporarily designed, 2019-built center is well located with a high traffic count, solid demographics, and includes daily needs that tenants appropriate to its suburban location. Starbucks occupies the end cap and other tenants include an investment-grade urgent care facility, a wine and food bar, and a nail salon. GSP sourced a lender that would provide a 10-year term, with a 5-year fixed rate, and no prepayment penalty, in order to give the sponsor maximum flexibility.
Rate: 5.66% Fixed for 5 years
LTV: 57%
Term: 10 Years
Origination Fee: 0.25%
Amortization: 30 Years
Prepayment: Open
Guaranty: Recourse -
$11,200,000 Perm Financing for Unanchored Retail; Tucson, AZ
July 27, 2022
Transaction Description:
George Smith Partners successfully closed a loan at 60% Loan-to-Value for the acquisition of a neighborhood shopping center in an A+ location in Tucson. The Sponsor was seeking non-recourse financing at the lowest rate. While the Sponsor was purchasing the Property as a long-term hold, the Property had 50% of the tenants rolling within 2 years of acquisition. GSP was able to find a lender that was comfortable with this roll given the strong performance during COVID, leading to a higher chance of lease renewal. While processing the loan, GSP advised the Sponsor to lock the SOFR index prior to the CPE announcement, saving them from a 30-basis point increase to the all-in rate.
Rate: 5.0%
Term: 10 Years
Amortization: 10 Years of Interest-Only
LTV: 60%
Prepayment: Defeasance
Fee: None
Guaranty: Non-Recourse -
$4,875,000 Acquisition Financing for an 88% Occupied Neighborhood Strip Center; Ventura County, CA
May 4, 2022
Transaction Description:
George Smith Partners successfully arranged $4,875,000 in acquisition financing for a non-grocery anchored retail shopping center in Ventura County. The Subject Property took a minor hit with rent collections during the Covid-19 pandemic and had many month-to-month tenants. GSP was able to illustrate to the Capital Provider how the Subject Property has rebounded nicely since then and has only been increasing in cash flow. GSP identified a Capital Provider who was comfortable with the mom-and-pop tenants, required no holdbacks of any sort for the vacant units, required no deposits to be held at their branch and provided a flexible prepayment penalty structure.
Rate: 4.00%
Term: 5 years fixed
Amortization: 30 years
LTV: 65%
Prepayment Penalty: 5/4/3/0/0
Banking Relationship/Deposits Required: None
Guaranty: Recourse -
$9,345,500 Acquisition Financing for 3 Single Tenant Drug Stores (2 CVS and 1 Walgreens)
October 6, 2021
Transaction Description:
George Smith Partners arranged 3 separate loans with a single portfolio lender for our Sponsor’s acquisition of 3 drug stores from 3 different sellers. Timing was critical as 2 of the Property acquisitions were part of a 1031 exchange nearing the deadline. The fixed rate financing with no prepayment gives the Sponsor maximum optionality with no rate risk. The Sun City Seller had to delay closing due to a defeasance issue. This resulted in a mid-process strategy shift. That property was removed from the exchange and the Omaha property was added to the exchange. GSP worked with the Lender and all counsels to have those 2 loans re-documented with new ownership structures to accommodate the exchange.
CVS – Sun City, AZ
20-year lease term
Loan Amount: $2,372,500
Rate: 3.29%
Term: 10 years, rate adjusts after year 5
Amort: 30 years
LTV: 67%
Prepayment: Prepayable anytime at par
Guaranty: Recourse
Lender Fee: 0.25%Walgreens – Omaha, NB
15-year lease term
Loan Amount: $4,410,000
Rate: 3.74%
Term: 10 years fixed
Amort: 30 years
LTV: 67%
Prepayment: Prepayable anytime at par
Guaranty: Recourse
Lender Fee: 0.25%CVS – Davenport, IA
12-year lease term
Loan Amount: $2,563,000
Rate: 3.29%
Term: 10 years, rate adjusts after year 5
Amort: 30 years
LTV: 67%
Prepayment: Prepayable anytime at par
Lender Fee: 0.25%