Non-Recourse $73,000,000 Bridge Loan above 80% of Cost for Creative Office Building in Seattle

Rate: LIBOR + 6.75%
LTC: 80%+
Term: 2 Years + 1 Year
Amortization: Interest Only
Prepayment Penalty: 18 months spread maintenance

Transaction Description:
George Smith Partners successfully arranged $73,000,000 in non-recourse, bridge financing for the conversion, renovation, and stabilization of the Seattle Design Center. The design center, comprised of two buildings in the Georgetown submarket of Seattle, Washington, historically served as a well-known destination for high-end home furnishings and design services. After acquiring the property in 2014, the Sponsor renovated the first 157,000 square-foot building. Upon completion, the Sponsor continued to operate the asset as the Seattle Design Center and consolidated the showroom/design tenants from the second building into the newly renovated building. Once the second building was vacated, the Sponsor began repositioning the 280,000 square-foot building from showroom space into creative office space. Upon completion, the building will have expansive 60,000 square-foot floorplates, exposed ceilings and concrete floors, glass walls for natural light, unobstructed views of downtown Seattle and Mt. Rainier, and full-service amenities, including an upscale fitness center and conference center. Pre-leased to 45% occupancy, Sponsor needed additional proceeds to complete the project. GSP identified a Lender who recognized the value of the project, supported by low supply and increasing market demand for creative office from tenants in the technology sector. Sized to 80%+ of total project costs, the $73,000,000 non-recourse loan was priced at LIBOR + 6.75% for a 24-month term with one, 12-month extension option. $49,000,000 of total proceeds was funded at closing with an additional $24,000,000 future funding allocated toward completion of the renovation, construction, tenant improvements and leasing commissions.


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    $5,100,000 Non-Recourse Bridge to Reposition an Industrial Building to Creative Office for a Single, Non-Credit Tenant

    June 21, 2017

    George Smith Partners arranged $5,100,000 of non-recourse, bridge financing to complete the conversion of a 26,000 square foot, 100% vacant, 1920’s vintage, industrial building into creative office space in a major Southwestern city. The property is well-located near a central business district and is 100% preleased to a single, non-credit-rated tenant. Although not investment-grade, GSP was able to source a Capital Provider comfortable with the tenant’s financial history and business operations. The sponsor acquired the property with cash and proceeds will be used to complete the conversion, taking advantage of the growing creative office market.

    Term: 24 Months + Two 12 mo. Extensions
    Rate: Confidential
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    70% Leverage Non-Recourse Refinance of a 65% Occupied Office Complex with Single Tenant Concentration and Rollover Risk at Loan Maturity

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    GSP arranged $16,510,000 in non-recourse first mortgage financing from a national debt fund on a 65% occupied Class A office complex in North San Diego County, California.  A credit tenant with a 2022 lease expiration accounts for over 90% of current property income and the vacancy is mostly comprised of a single 26,000 square foot contiguous space.

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    Rate: Confidential
    Three years plus two 12-month extensions
    Interest Only (initial term and extensions)
    Max Loan to Value:
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    15 months spread maintenance, open thereafter
    Lender Fee:


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    $5,500,000 Acquisition Bridge Loan for a 70% occupied Los Angeles Office

    April 26, 2017

    Transaction Description:
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    Despite the prime location, the subject had somewhat aged interiors and exteriors and was just 70% occupied when our Sponsor executed the purchase contract.  The income was below break-even debt coverage on the proposed loan. Most of the in-place tenants were paying well below market rent. One tenant was under a month to month lease and several others were facing lease roll in the next six months. On-site property management was charging an above market rate. Actual historical cash flow was well below potential.

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    Rate: Prime + 0.5%
    Amortization: 18 months IO; 25 years thereafter
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    Origination Fees: 0.5%

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    Rate: LIBOR+5.45%
    Term: 3 Years + One-Year extension
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    LTC: 92%
    Prepayment Penalty: 18 Month Minimum Interest
    Recourse: Non-Recourse; Carve-Outs to Entities
    Lender Fee: 1.00%

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