Rate: 4.2%
Term: 10 year fixed rate loan
Amortization: 25 years
LTV: 69%
Prepayment: None
Guarantee: Recourse
Transaction Description:
George Smith Partners secured $9,730,000 acquisition financing for a 56,747 square foot shadow anchored retail center that was 70% occupied at the close of escrow. Shadow anchored by Home Depot and Fry’s Food & Drug, the 14-tenant shopping center is located in a Southwestern MSA. Fixed at 4.2% for ten years, the loan amortizes over 25 years and does not carry a prepayment penalty.
Challenges:
During due diligence, a tenant representing 27% of the net rentable area terminated their lease bringing occupancy to 70%. Our Sponsors required a permanent loan execution and would not consider a bridge to perm option.
Solutions:
GSP identified a lending source who was knowledgeable about the strength of this sub-market and comfortable with 30% vacancy. They identified the upside potential and rental opportunities in the local market. Our Sponsor’s considerable investment track record and financial strength further solidified the loan strength and allowed for a permanent loan instead of a bridge loan.
Related Financings
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Low Debt Yield, 3.77% Coupon Permanent Financing for the Acquisition of a Recently Developed Grocery-Anchored Retail Center; FL
September 25, 2019
George Smith Partners successfully placed $14,690,000 in non-recourse, ten-year fixed rate first mortgage debt for the acquisition of an approximately 54,000 square foot, 96% occupied, recently developed retail center in Western Florida. An investment-grade grocery anchor on a newly signed long-term lease comprises approximately 75% of the collateral. The anchor has no sales history at the Property and is not required to report sales going forward. GSP sourced a lender to provide full term non-recourse Interest-Only financing subject to a low 7.35% debt yield. The 65% leverage loan has a 3.77% fixed coupon over the ten-year term.
Rate: 3.77%, Fixed
Term: 10 years
Amortization: Full Term Interest-Only
Loan to Value: 65%
Prepayment: Defeasance
Lender Fee: None