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Industrial

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    $3,500,000 10-Year Full Term Interest-Only Permanent Financing, 40,000 SF Industrial Business Park; Murrieta, CA

    November 3, 2021

    Transaction Description:

    George Smith Partners secured $3,500,000 in non-recourse debt to refinance a Southern California industrial business park. The Property is a 40,000 square foot, 100% occupied, industrial/flex building, majority occupied by automotive tenants. The financing takes out the existing debt, distributes capital for a significant roof repair, and redistributes equity to the Sponsor. The loan was underwritten to 60% LTV. The 10-year full term interest structure maximizes cash flow for the Sponsor. The fixed-rate loan priced at 1.80% over the 10-year SWAP.

    Rate: 3.42% (1.80% over the 10 Year SWAP)
    Term: 10 Years
    Amortization: Full-term Interest-Only
    Loan to Value: 60%
    Guaranty: Non-recourse
    Lender Fee: Par
    Prepayment: Defeasance

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    $9,542,000 Take-Out Refinance of Owner-User, Flex Creative Office & Warehouse; Los Angeles, CA

    September 15, 2021

    Transaction Description:

    George Smith Partners successfully arranged a take-out loan of $9,542,000 for a recently renovated, two-story, flex property just south of downtown Los Angeles. The total collateral consists of a 40,417 SF building and three separate surface parking lots totaling 86 spaces. The Sponsor, a repeat client, acquired the Property two years ago as part of a three-property portfolio that GSP arranged the financing for. Those proceeds were used to complete an adaptive reuse of this former industrial building into creative office and warehouse. The Sponsor moved its headquarters to this location and occupies over half of the space. The remaining units for lease attract tenants priced out of the more expensive downtown LA and Culver City areas.

    There were significant challenges during the construction period, including a total loss fire on one of the properties within the acquired portfolio, the impact of COVID-19 on the Sponsor’s businesses and a maturing loan with the acquisition lender. GSP leveraged its strong relationships and financing expertise to work out extension and repayment solutions with the existing lender while identifying a new capital source to provide favorable terms for owner-user financing. The loan amount turned out to be well above the acquisition price and renovation costs.

    Rate: 3.625% Fixed
    Term: 3 Years
    LTV: 65%
    Prepayment: None
    Guaranty: Full Recourse

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    $3,450,000 in Permanent Financing for an Industrial/Flex Center; Southern California

    September 8, 2021

    Transaction Description:

    George Smith Partners secured $3,450,000 for the refinance of an industrial/flex business park in Southern California. The Property is 66,600 square feet across 6 buildings with 31 tenants. GSP identified a lender that could lock the rate at 2.75% for more than 4 months to allow the prepayment penalty on the existing loan to burn-down. The Lender also agreed to increase the loan amount during due diligence to finance large near-term roof repairs. The loan has a 10-year term with five years of interest- only payments.

    Rate: 2.75% Fixed
    Term: 10 years
    Amortization: 5 Years Interest-Only, 25 Years Am Thereafter
    Guarantee: Non-Recourse
    Prepayment: Yield Maintenance Years 1-5, Stepdown Thereafter

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    $35,900,000 Construction Takeout Financing for Single Tenant Industrial Asset; Austin, Texas MSA

    September 1, 2021

    Transaction Description:

    George Smith Partners successfully secured $35,900,000 in construction takeout financing for a state-of-the-art industrial project located in the Austin, Texas MSA. The manufacturing, research and office facility is 130,000 square feet. Spanning a 103-acre site, the building offers an additional 93 acres of undeveloped, shovel-ready land, yielding a development potential of more than 1,000,000 square feet of light / heavy commercial and industrial use.

    The financing recapitalized construction costs related to the facility development, and utility infrastructure improvements.

    The Sponsorship team acquired the undeveloped site in 2019, a strategic parcel in a rapidly developing industrial corridor, and subsequently developed the Class A facility. In order to take out the construction financing, GSP was able to identify a local lender with the expertise to develop a credit profile that appropriately accounted for the startup’s long-term viability, while also understanding the significant value of the excess developable land in a high-growth micro market within the Austin MSA.

    All Terms Confidential

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    $3,000,000 Bridge to Permanent 5-year Loan for a Vacant Single Story 50,000 SF Warehouse; Western States

    August 4, 2021

    Transaction Description:

    George Smith Partners successfully placed a $3,000,000 bridge to permanent loan to fund the purchase, tenant improvements, leasing commissions and carry (real estate taxes, insurance, and debt service) for a vacant 50,000 SF single-story warehouse. The deal presented a couple challenges; the Sponsor had credit issues and the building was 100% vacant. The strong sponsorship experience, low vacancy in the market and the building’s high-level of quality ameliorated these issues. Lastly, the transaction had to be completed within the tight time constraints of a 1031 exchange.

    Rate: 4.25% During Construction, Five-year Treasury + 3.25% During Term
    Term: 5 Years
    Amortization: 25 Year
    Prepayment: Term Period: 3%,2%,1%,0%

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    Non-Recourse Bridge Acquisition Financing for Industrial Building; Gardena, CA

    July 21, 2021

    Transaction Description:

    George Smith Partners successfully arranged a bridge acquisition financing for a single-tenant industrial building in Gardena, CA. The Property is 9,300 SF on an approximate 18,731 SF parcel. The previous owner occupied the space, and the building is now vacant. There was an existing environmental issue that limited the pool of interested capital providers. However, GSP leveraged its market expertise and relationships to identify a lender comfortable with the Property and Sponsor, who is a repeat client. GSP secured a 12-month, non-recourse bridge loan at 7.90% fixed with interest-only payments and no prepayment penalty. This will provide the Sponsor time to resolve the environmental issue, lease the Property and season it for permanent financing. The financing closed within 12 days of term sheet issuance.

    Rate: 7.90% Fixed
    Term: 12 months, with Extension Options
    Amortization: Interest Only
    LTP: 40%
    Prepayment: None
    Guaranty: None

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    Non-Recourse Bridge Acquisition Financing for Industrial Building; Wilmington, CA

    June 2, 2021

    Transaction Description:

    George Smith Partners successfully arranged bridge acquisition financing for a single-tenant industrial building in Wilmington, CA. The Property is 3,950 SF on an approximate 8,640 SF parcel. The previous owner occupied the Property, and the building is now vacant. GSP secured a 12-month, non-recourse bridge loan at 7.90% fixed with interest only payments and no prepayment penalty. This will provide the Sponsor time to lease the Property and season it for permanent financing. The financing closed within two weeks of term sheet issuance.

    Rate: 7.90% Fixed
    Term: 12 Months, with Extension Options
    Amortization: Interest Only
    LTP: 57%
    Prepayment: None
    Guaranty: None

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    $1,200,000 Permanent Refinance on Multi-Tenant Industrial Building for Sponsor with Discharged Bankruptcy; Sun Valley, CA

    May 26, 2021

    Transaction Description:

    George Smith Partners successfully arranged a $1,200,000 permanent refinance for a fully occupied, eight-unit industrial building in the Sun Valley neighborhood of northern Los Angeles, CA. The Sponsor acquired the fully entitled site in 2015 and completed construction in 2016. The Property consists of two buildings totaling 8,084 SF on a 20,452 SF parcel.

    The Sponsor had a Chapter 13 bankruptcy due to the impacts of the Great Recession. Having worked diligently to pay off creditors, the bankruptcy was ultimately discharged in 2017. At the same time, the Sponsor’s real estate portfolio grew substantially despite very limited access to capital sources. GSP was engaged in hopes of capitalizing on the low interest rate environment despite the bankruptcy being on record.

    GSP focused on the Sponsor’s strong track record and leveraged its longstanding relationship with a lender who provided a 4.90% fixed rate for 5 years, with a 5-year extension option. The loan is interest only the first year and then fully amortizing for the remaining 24 years.

    Rate: 4.90% Fixed; Resets after Year 5
    Term: 5 Years + Extension Option for 5 Years
    Amortization: 1 Year Interest Only; 25 Years thereafter
    LTV: 58%
    Guaranty: Recourse

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    $19,550,000 Non-Recourse Cold Storage Construction Loan to 81% of Cost; Secondary Market

    April 28, 2021

    Transaction Description:

    George Smith Partners arranged $19,550,000 of senior construction financing for a ground-up cold storage facility located in Jurupa Valley, CA. The 125,000 square foot facility will serve as the headquarters for West Coast Cold Storage, a “for rent” cold storage provider focused on providing both refrigerated and frozen space to their Southern California customers. Existing cold storage facilities nationwide have an average age of over 40 years, demonstrating the need for new development within the space. With the sudden increase in online grocery orders and delivery, demand for well-located cold storage space has spiked. This flagship building will feature increased energy efficiencies and provide a variety of racking configurations to accommodate customer needs.

    Located two blocks from State Highway 60, the Subject Property offers clients immediate access to the entire Inland Empire and Northern San Diego County. This location is also part of the Port of Los Angeles transportation line that handles 20% of incoming U.S. cargo and feeds all Southern California.

    Structured to minimize the Sponsor’s equity investment, the non-recourse loan is sized to 81% of development costs and carries an 18-month term. Minimum interest requirements were negotiated to less than 5.5% of the committed loan amount as cold storage has a much shorter construction timeline when compared to other product types. Origination fees were allocated to post Certificate of Occupancy financing to further reduce the cash equity needed to close.

    Rate: 9.25%
    LTC: 81%
    Origination Fee: 0.50%
    Term: 18 Months Initial Term, One 6-Month Extension
    Amortization: Interest Only
    Prepayment: Subject to Minimum Interest Estimated at 12 Months
    Guaranty: Non-Recourse with Completion Guaranty

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    $2,450,000 High-Leverage SBA Acquisition Financing for Office Property; North Hollywood, CA

    April 14, 2021

    Transaction Description:

    George Smith Partners arranged $2,450,000 in SBA Owner-User Acquisition (90% Loan-to-Purchase Price) financing for an office/industrial flex property located in North Hollywood, CA. The Sponsor approached GSP to assist with the acquisition of the Property to relocate their company headquarters. The Sponsor required a flexible loan with high leverage and a low interest rate. The Sponsor had already entered escrow at the time of approaching GSP and was on a strict timeline with only 60 days to close. GSP quickly and successfully structured a first trust deed from a bank as well as an SBA B-piece to secure 90% of the purchase price. GSP was able to provide the Sponsor with a 25-year term, with the first 10 years fixed at a blended rate of 3.80%. The flexible prepayment structure is equal to 5-5-4-4-3-3-2-2-1-1. The high leverage loan allows the Sponsor to use equity towards the continued growth of their business. Thanks to our long-standing relationship with the SBA Certified Development Company (CDC), GSP was able to meet the Sponsor’s deadline and close this transaction in under 60 days.

    $1,375,000 Senior Loan @ 4.75%
    $1,075,000 2nd (SBA) @ 2.58%

    Term: 25 Years
    Loan-to-Purchase Price: 90%
    Prepayment: 5-5-4-4-3-3-2-2-1-1

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    $44,500,000 Heavy Bridge Construction Financing to Add Several Uses to an Existing Office and Warehouse; Secondary Market; San Luis Obispo, CA

    April 14, 2021

    Transaction Description:

    George Smith Partners arranged $44,500,000 for heavy bridge financing in San Louis Obispo, CA to recapitalize and fund construction for additional uses on an existing asset. The completed Project will include five uses including multifamily, warehouse, office, self-storage, and a brewery. This is among the largest private projects actively in development in the local market.
    The Sponsor has been very creative in obtaining the highest and best use for the asset in a supply constrained market. Despite challenges facing construction projects in today’s volatile commodity market, GSP was able to secure a capital provider to structure high leverage supported by the strong market and underwriting.

    All Terms Confidential

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    $5,376,000 (60% LTC) Bridge Loan for Cash-Out Refinance of Industrial Building; Northern California

    March 24, 2021

    Transaction Description:

    George Smith Partners secured $5,376,000 of bridge financing for the refinance of a two-tenant industrial building in Fairfield, CA. The Property is favorably located within a mile of three major freeways and is only a 45-minute drive to both San Francisco and Sacramento. The building is currently 100% occupied, but there were cash-out proceeds required to reposition the Property to make it more attractive to potential buyers. The 26,000 SF building also has 95,000 SF of improved yard space adjacent, which is a major draw for the current tenants. GSP was able to secure a lender that could get comfortable with a majority of the income being derived from the yard space. The financing was comprised of a senior and a mezzanine loan. The blended terms provided a 60% LTC priced at 7.43% with a 1.20% origination fee. The 12-month terms provide the Sponsor the ability to execute his business plan.

    Blended Rate: 7.43% Fixed
    Term: 12 Months
    Amortization: Interest Only
    LTV: 60%
    Loan Fee: 1.20%
    Reserves: None
    Prepayment Penalty: None
    Guaranty: Non-Recourse for Senior / Recourse for Mezzanine Loan