| Transaction Description: |
| $10,312,500 Fixed Bridge Loan for the Acquisition and Reposition of a Retail/Office Building in Beverly Hills. GSP secured bridge financing for an 18,000 sq. ft., 3-storey retail and office building in Beverly Hills. The building’s excellent location has always afforded it full occupancy, but it has not been renovated to include modern amenities and rents are well below market. The sponsor plans to significantly upgrade the common area spaces, to include handicap access, new flooring, lighting and wall finishes, as well as installing a state-of-the-art elevator. The exterior of the building will also be resurfaced. Following the renovations, the building will command nearly double the rents that tenants are now paying. |
Challenge:
• Low DCR: In place DCR at closing was 0.60 – substantially below breakeven.
• Seismic Concerns: Lender was reluctant to lend on a brick building that was built in 1924. |
Solution:
• Low DCR: GSP demonstrated that the borrower had sufficient recurring cash flow from other properties to debt service this loan and was able to negotiate no holdbacks for interest reserve.
• Seismic Concerns: GSP persuaded lender to underwrite based on land value and worked with the appraiser to help establish the land value. No third party seismic assessments were necessary. |
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| Rate: 6.2% fixed |
| Term: 3 yrs |
| Amort: Interest Only |
| LTV: 71% of land value |
| LTC: 75% of purchase price |
| DCR: 0.60 in place |
| Prepayment: Open |
| Recourse |
| Lender Fee: .75% |
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Holdbacks: None
Assumable
Deposits of at least $400,000 required
Lender held to all original terms and closed two weeks ahead of schedule.
Key Players: Farz Emrani,
Anna Saucier
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