| Transaction Description: |
| $29,300,000 Permanent Loan with $15.7 Million Cash-out in Beverly Hills. GSP secured permanent financing for an 11-story office building in Beverly Hills, built in 1964. |
Challenge:
1. Environmental: A Phase I Assessment reported that USTs had been installed underneath the building in the 1970s, but there was no record of proper closure. Owner knew nothing about such USTs.
2. Zoning: Due to the age of the property, zoning regulations have since changed in Beverly Hills, requiring that buildings are no more than 4 stories tall.
3. Market: It is no secret that the capital markets have tumbled during the past few months, making this a very difficult time to close any large loans, let along one offering half cash-out to the borrower.
4. Defeasance: Due to the borrower’s desire to have commitment on the loan prior to engaging defeasance, the defeasance consultants were not engaged until 5 days prior to the anticipated closing date. Furthermore, a defeasance of this size requires rating agency approval, which usually takes 5-10 business days. |
Solution:
1. Environmental: GSP engaged a vendor relationship to quickly turn around a Phase II. Received verbal clearance of no contamination to the underground soils in 7 days from engagement.
2. Zoning: GSP was able to get the lender comfortable with an endorsement issued by title to cover the legal non-conforming height of the building.
3. Market: GSP maintained a close working relationship with the lender and all team members throughout the process of the loan in order to gain assurance that the deal would close.
4. Defeasance: GSP gained assurance that the defeasance could close in 5 days. Defeasance consultants obtained rating agency approval in 1 day. |
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| Rate: 6.05% fixed for 5 yrs |
| Term: 10 yrs |
| Amort: 30 yrs |
| LTV: 58% |
| DCR: 1.25 |
| Prepayment: YM |
| Lender Fee: Par |
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Recourse: 25%
No tax, insurance, TI or LC reserves
Lender held to all original terms.
Key Players:
Farzin Emrani, Anna Saucier
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