Rate: LIBOR+Low 200s
Term: 3 Years + Options
Amortization: Interest Only
LTC: 50%
Lender Fee: 0.65%
Non-recourse

Transaction Description: George Smith Partners secured a $22,000,000 non-recourse acquisition loan for the purchase of the world-famous Fred Segal Building in West Hollywood, California. The Sponsor required a capital provider that could provide the highest certainty of execution for this acquisition given a non-US status and lack of American based assets and operating accounts. The small 28,000 square foot improvement calculates to a leveraged $786 per square foot loan on an asset with 84% of the gross rentable square footage rolling over the next three years.

George Smith Partners identified an Lender that understood the unique attributes of the property and did not shy away from the high dollars per square foot despite the lack of credit tenants. The Sponsors are accomplished retailers who understand the dynamic changes taking place in this retail real estate market and the future Flagship possibilities of this location. Floating in the LIBOR “200s”, there is no floor for this three year non-recourse interest only transaction.

Rate: 7.9%
Term: 1 Year with 1 Year extension
Amortization: Interest Only
LTV: 65% As-Is
Lender Fee: 1¼ point
Prepayment Penalty: None

Transaction Description: The Sponsor initiated a major capital improvement project to convert his dated beach-side retail center into a boutique destination entertainment center with outdoor seating and high-end restaurants. His original plan of investing $3,000,000 for upgrades was funded with traditional bank construction debt. Increased construction costs and the addition of several new tenants requiring build-outs resulted in a $2,000,000 cost over-run. With 85% of the work complete, an additional construction delay to re-underwrite would jeopardize the new tenant occupancy with the coming summer beach season, necessitating an immediate funding.

George Smith Partners identified a private lending relationship that was comfortable funding into a broken title priority and provided an additional $2,300,000 beyond the existing bank debt to complete the construction. Funding occurred five days from introduction. Sized to 65% of the as-is value- there was very limited cash-flow at the time of funding, the completed value upon stabilization will exceed $14,000,000. Priced at 7.9% for one year, the interest only loan does not have an exit fee or prepayment penalty.