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

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.

Advisors

Steve Bram Managing Director & Principal / GSP Co-Founder

Allison Higgins Senior Vice President

Rate: 10-Year Swap + 2.20% (5.09% Coupon)
Term: 10 years
Amortization: 5 years interest only, followed by 30 years amortization
LTV: 65%
DSCR: 1.35X
Prepayment: Defeasance. 2-year lock out period
Guarantee: Non-Recourse
Lender Fee: Par

George Smith Partners successfully arranged $7,800,000 in cash-out permanent financing secured by a shopping center anchored by national grocery store and discount retailer, located in Tulare, California. The property consists of 15 tenants with a total rentable area of 82,852 SF.

The subject property is encumbered by a ground lease. Located in a tertiary market, the property is 88% occupied. The tenants are under short-term leases, 90% of which will roll within the first five years of the loan term. GSP identified a capital provider who was comfortable with ground leases and short-term tenant leases by underwriting a reserve for tenant improvements and leasing commissions. The non-recourse loan floats at 10-year Swap + 2.20% for 10 years. Interest only for 5 years, and 30 year amortization thereafter.

Rate: Prime + 0.5%
Term: 2 Years
Amortization: Interest Only
LTC / LTV: 72% / 65%
Recourse: Full Recourse
Prepayment Penalty: None
Lender Fee: 0.5%

George Smith Partners arranged $6,800,000 in bridge financing for the acquisition of a 50-unit 3-property multifamily portfolio in North Long Beach, California. The three properties were all late 1950s vintage properties with significant deferred maintenance and below market rents. The Sponsor’s business plan was to reposition the properties and release the units at market rents. The Sponsor required a bank lender that would only require recourse from the general partner, which constituted 10% of the equity, and not from any of the limited partners, some of whom were investing more than 25% of the equity. By emphasizing the gentrifying location and the Sponsor’s track record in the value added apartment space, George Smith Partners was able to successfully source a bank lender that was comfortable with recourse from the general partners only and who closed the transaction in 45 days.

Sized to an aggressive 72% of total cost, the two-year loan is interest only. The loan floats at Prime plus 0.5% (5.25% today) with no prepayment penalty, and the lender fee was a minimal 0.5%. Despite the portfolio’s weak cash flow during the rehabilitation period, an interest reserve was not required.

Advisors

Evan Kinne Managing Director, GSP; CEO, AXCS Capital