$6,500,000 Cash-Out Permanent Refinance for a Multi-Tenant Research & Development Facility in Bristol, PA

Rate: 5.03% (10 year swap +1.93%)
Term: 10 Years
Amortization: 2 years Interest Only then 30 years amortization after
Loan to Value: 72%
DSCR: 1.40X
Prepayment: Defeasance
Guarantee: Non-Recourse
Lender Fee: Par

Transaction Description:
George Smith Partners successfully arranged $6,500,000 in cash-out permanent refinance secured by a 104,974 SF, multi-tenant Research & Development facility in Bristol, Pennsylvania. The loan proceeds will be used by the Borrower to pay off the existing debt and to buyout a partner.

Challenges:
The Subject Property is fully occupied with short-term leases. The Major Tenant is one of the largest chemical companies in the world, which occupies 72% of the total building space. The Tenant has a lease term of less than three years, and their lease requires only a 6-months notice period. In addition, the Appraiser had a difficult time finding comparables because of the Research and Development special use of the Facility.

Solution:
GSP identified a CMBS lender willing to provide a 10-year loan structured with 15 months of major tenant cash flow sweep prior to lease expiration. GSP provided comparables that the Lender and Appraiser found acceptable. The appraised value was within the range to receive the full loan amount that the Borrower requested. Priced at 10-year SWAP + 1.92% for the 10-year term, the fixed loan sized to 72% of value, 2 years Interest Only, then 30 years amortization.

Advisors

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