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$7,400,000 Hilton Flag Non-Recourse Reposition Bridge to 75% of Stabilized Value

Rate: 30 day LIBOR + 550
Term: 36 months plus two 12 month extensions
Amortization: Interest only
Initial Funding: 75% of “as-is” value
Total Funding: 75% of “as-stabilized” value
Lender Fee: Par
Guarantee: Non-Recourse
Exit Fee: 2.0%
Prepayment: 18 Month Yield Maintenance

George Smith Partners successfully structured a $7,400,000 non-recourse bridge loan secured by a 102-room, limited service Hilton-flagged hotel located in a tertiary Alabama market. GSP targeted a capital provider who was not only knowledgeable about the location and marketplace, but also comfortable with the Sponsor’s management expertise, their ability to execute the property improvement plan, and improve RevPAR penetration. GSP vetted the business risk exposure upfront with the capital provider and structured objective criteria that satisfied both the Sponsor and Lender. Floating at 30 day LIBOR plus 5.50%, the non-recourse loan will be interest only for the 36-month loan term.

Related Financings

  • $25,500,000 Non-Recourse Bridge Financing for an Acquisition of an Office Building; Phoenix, AZ

    December 18, 2019

    Transaction Description:

    George Smith Partners arranged $25,500,000 in non-recourse bridge financing for the acquisition of a 230,000 square foot Class A office building located in the heart of Phoenix, Arizona’s Midtown District. Positioned on a heavily trafficked thoroughfare of a major professional corridor, the site benefits from its central location, proximity to Downtown Phoenix and abundance of local economic drivers. The Project, built in 1982, had been well-maintained but was running a below-market occupancy rate of 82% due to the recent expiration of a large tenant lease. This bridge facility allowed the Canadian-based Sponsor to purchase the asset and undergo a proposed renovation, bringing the design up to competitive market standards in order to successfully lease-up and stabilize the asset.

    By focusing attention on sophisticated bridge lenders active in the local area, GSP identified a capital provider who understood the growth of the market. The selected Capital Provider structured around the Project’s current vacancy, recognizing the strength of the Sponsor and their ability to successfully execute on the intended business plan of value creation. The loan was structured with minimal cash management language and featured pari passu funding throughout the term. The interest only non-recourse bridge loan was priced at a spread of 350 basis points over the 30-Day LIBOR, with a three-year term and two 12-month extension options.

    Rate: 30 Day LIBOR + 3.50%
    Term: 36 Months with Two 12-Month Extensions (3+1+1)
    LTC: 65%
    Amortization: Interest Only
    Guaranty: Non-Recourse

  • High Leverage Custom Program for Quick Close Bridge Financing of Multi-Family Buildings; Los Angeles, CA

    November 6, 2019

    Transaction Description:

    George Smith Partners arranged acquisition bridge financing for a value-add, multi-family property in Los Angeles, California. One of our more experienced multi-family owner/operators has become experienced in sourcing opportunities to quickly close on troubled multi-family properties. His ability to act quickly often allows him to become the chosen Buyer, purchasing these Properties at a large discount.

    GSP worked with a local REIT to develop a program that includes a first and second mortgage of up to 85% of acquisition price. The loan is designed to provide the same surety of close as an all-cash buyer, with no appraisal needed and the ability to close as fast as 5 business days. The loan is non-recourse and has no prepayment penalty.

    These loans are cheaper and easier than equity partners and allow the Sponsor to take advantage of smaller opportunities using very little cash. With less than $400,000 of equity, the Sponsor was able to purchase a $2,015,000 building. At close the Subject Property was worth close to $2,500,000, allowing the Sponsor to quickly flip the Property. This is the third time GSP has used this custom created loan program to procure financing for our client.

    Blended Rate: 8.00%
    Loan to Purchase Price: Up to 85% (83% on this transaction)
    Term: 12 Months
    Guaranty: Non-Recourse

  • $31,380,000 High-Leverage Bridge Loan to Acquire & Renovate 89,000 SF Office Building in South Pasadena, CA

    June 6, 2018

    George Smith Partners secured $31,380,000 of non-recourse bridge debt to purchase and renovate a multi-tenant Class A office property in South Pasadena. The Sponsor purchased the property with the intent to add significant value through increasing rents and occupancy. The Sponsor purchased the property because of the very strong demographics in South Pasadena and intends to lease to tenants that will pay a premium to be near their clientele. The challenge was convincing the appraiser to use Downtown Pasadena rents since there are no comparable properties in the immediate area. George Smith Partners successfully arranged financing at 85% of cost given the expected increase in value over the next three years.

    Rate: L+565
    Term: 2 years + Two 12 Month Extensions
    LTC: 85%
    Amortization: Interest Only
    Prepayment: 18 Months Minimum Interest
    Guarantee: Non-Recourse

  • $6,647,000 Non-Recourse Acquisition Bridge Financing for Self-Storage Facility; 80% of Cost

    January 24, 2018

    George Smith Partners arranged $6,647,000 of non-recourse financing for the acquisition and reposition of a 1,713-unit self-storage facility in the Pacific Southwest. The national balance sheet lender provided a non-recourse loan up to 80% of total project cost that includes funding 100% of future planned expenses (approximately $1,100,000) to upgrade the property’s roofs, parking lots, curb appeal, signage and down units. Interest expense is not incurred on the capital improvement funds until drawn. Borrower cash flow is maximized as the loan is interest only during the initial three-year term. The loan floats at 4.25% over one-month Libor and carries two one-year extension options.

    Rate: 1 Month LIBOR + 4.25%
    Term: 36 Months plus two 12-Month Extensions
    Amortization: Interest Only During Initial Term & Extensions
    LTC: 80%
    Prepayment: 12 Month Minimum Interest
    Guarantee: Non- Recourse
    Lender Fee: 1.00% In / 0.5% Out