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Industrial

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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

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    $13,800,000 Non-Recourse Bridge Financing for an Industrial Manufacturing Facility; California

    March 10, 2021

    Transaction Description:

    George Smith Partners secured non-recourse bridge financing for a manufacturing facility in California. The Sponsor’s goal was to expand their manufacturing facility from 120,000 s.f. to 200,000 s.f. for their current tenant and provide them with clean manufacturing and dock high loading doors in the warehouse. GSP was able to secure a lender that found the location of the Property desirable due to the close proximity and access to major highways, the Tenant’s long-term investment in the building/equipment and most importantly, the Sponsor’s strong experience and track record.

    Rate: 4.75%
    Term: 5 Years
    Amortization: Interest Only
    Guaranty: Non-Recourse, Completion, Repayment, “Bad” Acts and Environmental
    Lender Fee: 1.00%

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    $20,675,000 Post-Closing Acquisition Financing for an Industrial Asset; Los Angeles, CA

    January 20, 2021

    Transaction Description:

    George Smith Partners arranged $20,675,000 in post-closing financing collateralized by an 185K square foot infill flex/R&D industrial asset located in Los Angeles, CA. The recapitalization repatriated equity and provided future funding for the renovation of the Property.

    The asset provides optionality for multiple upside scenarios such as sound stage and creative office use. The business plan is to renovate the Property and cater to growing demand from the many media, entertainment and technology tenants in the Los Angeles market.

    Amidst a time of market volatility and economic uncertainty, George Smith Partners was able to identify a capital source that understood both the value of the asset and the ability of the Sponsor to execute on the intended business plan.

    All Terms Confidential

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    $44,000,000 Non-participating Bridge Financing for Industrial Acquisition and Reposition, 95% LTC, West Coast

    November 25, 2020

    Transaction Description:

    George Smith Partners successfully arranged $44,000,000 in non-recourse, non-participating bridge financing at 95% of cost for the lease-up and repositioning of a 5-property, 650,000 SF, industrial complex located on the West Coast. The Sponsor purchased the complex vacant and the seller carried the first mortgage for 4 months. From the open of escrow with the Seller, to the closing of this loan, there was over 82% of the available space leased making up 77% of rent with letters of intent for the remainder of the space. Although this was during the COVID-19 pandemic, and there was considerable deferred maintenance and capital expenditure required to get the properties rent ready, the space leased quickly due to the Sponsor expertise and relationships and a strong submarket.

    The loan provides funds for the deferred maintenance, the capital expenditures, the tenant improvements, leasing commission and carry until the tenants are in and paying rent. Additionally, there is an earn-out of $2,000,000 after the 18th month as the asset has other potential value-add attributes.

    Rate: LIBOR + 3.95% with a floor on LIBOR of 50 basis points
    Term: 3 years interest only
    Amortization: Two 1-year extensions with 30-year amortization
    LTC: 95%
    Guaranty: Recourse, Completion of deferred maintenance and Cap-Ex, “bad” acts and environmental
    Lender Fees: 1% origination and 0.25% exit fee

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    $4,700,000 Refinance with Cash-Out for Single-Tenant Manufacturing Industrial; El Cajon, CA

    November 4, 2020

    Transaction Description:
    George Smith Partners placed a $4,700,000 refinance loan with cash-out for a single-tenant industrial property in El Cajon, San Diego County. This highly specialized facility is one of only two locations in the US that is approved to manufacture key components and assemblies for military and commercial aircraft currently in service.

    The Sponsor acquired the Property in 2018 with a bridge acquisition loan. In March 2020, GSP was engaged to refinance the maturing bridge loan with permanent financing including cash-out proceeds. However, the California “stay-at-home” order was issued soon thereafter resulting in a challenging lending market for the Property.

    GSP helped the lenders become comfortable by focusing on the low leverage, the strength of the Sponsor and the Tenant, and the fact that the Property continued to operate at full capacity without interruption due to be a critical Department of Defense supplier. In addition, the Tenant recently exercised its third extension option to the existing lease with an increased cash flow closer to market rents, thereby continuing its long-term commitment to the Facility.

    While holdback reserves are increasingly common in the current environment, GSP negotiated to have reserve payments deferred until the fourth year of the loan and on a monthly schedule instead of the typical lump sum holdback at closing.

    Rate: 4.65%
    Term: 7 Years
    LTV: 51%
    DSCR: 1.30x
    Prepayment: None

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    $19,775,000 Bridge Loan for Acquisition of Flex Industrial Building; Temecula, CA

    May 6, 2020

    Transaction Description:

    George Smith Partners, on behalf of Stos Partners , arranged $19,775,000 in bridge financing for the acquisition of a specialty flex industrial asset located in Temecula, CA. The Sponsor was able to negotiate a long-term lease renewal for the primary credit tenant, whose term was nearly expired, creating significant value in the process.

    The recently purchased industrial building maintains a mix of specialized uses, as well as an additional near-term vacancy for a smaller flex space, posing both an opportunity and a challenge within the markets. The specialized and varied uses of the building, including laboratory rooms, light manufacturing areas and office/distribution space, required costly buildouts with tenant improvement dollars as the primary tenant expanded into additional space, requiring additional structure. Despite strong market fundamentals, the disruption with the COVID-19 pandemic changed the economy overnight. However, the financials and credit profile of this project only grew stronger and more viable with time.

    George Smith Partners was able to identify a capital source that understood both the quality of the asset and the ability of the Sponsor to execute on the intended business plan. Amidst a time of great market volatility and economic uncertainty, the Capital Provider held their original pre-COVID structure and terms.

    Proceeds: $19,775,000
    LTC: 65%
    Amortization: Interest Only
    Guaranty: Non-Recourse

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    $61,392,000 Refinance of a 207-Acre, Two Million Square Foot Pharmaceutical Campus in Tri-State Area

    April 15, 2020

    Transaction Description:

    George Smith Partners arranged $61,392,000 in first mortgage debt for the refinance of a mixed-use office, industrial and lab campus in the Tri-State area (New York, New Jersey, Connecticut). The corporate user developed the campus in phases between 1906 and 2008, and the improvements consist of over two million square feet of laboratory, pharmaceutical manufacturing, office and support buildings including a central utility plant. The user still owns some buildings, and leases others on the campus. The Sponsor purchased the asset in 2015 with a long-term redevelopment goal to create a life sciences destination that will build on the existing laboratory, manufacturing, and office uses. The Property will ultimately feature shopping, dining, meeting and educational experiences as part of a cohesive “work/live/play” community.

    GSP sourced a loan from a capital provider that was able to underwrite in-place income with flexibility for an ever-evolving business plan. The three-year, interest only initial loan term is structured as an initial advance of $42,940,000 with the remaining $18,452,000 future funded for approved capital expenditures and tenant improvements/leasing commissions for to-be-leased space. No interest is due on funds until drawn. The loan is open for prepayment at any time subject to a 24-month minimum interest payment.

    Term: Three years plus two 12-month extensions
    Amortization: Interest Only during Initial Term
    Max Loan to Stable Value: 60%
    Prepayment: 24 months minimum interest
    Lender Fee: 1%

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    $2,800,000 Owner User Business Real Estate Loan and Line of Credit for Industrial Property; Los Angeles, CA

    November 27, 2019

    Transaction Description:

    George Smith Partners placed a structured senior and collateralized line of credit revolver in a cash-out execution for a business in Los Angeles. The first loan was structured to be self-liquidating over 15 years with a fixed rate of 3.90%. The $1,000,000 second trust deed is a true revolver that can be used as a check-book and has no limitations on uses. The second loan is priced at 3.75% (Prime minus 1%). Funds may be drawn down, re-paid and re-drawn without additional bank approval. There is no non-utilization fee. As the credit line is collateralized, there is no mandatory “clean-up” for funds outstanding over 12 months.

    SENIOR
    Rate: 3.9% Fixed for 15 Years
    Amortization: 15 years self-liquidating
    Fee: 1/4% /25bp
    Prepayment: 3-3-2-2-1 open
    LTV: 75%
    DCR: 1.20

    REVOLVER
    Rate: Prime -1% or 3.75%
    Amortization: Interest Only
    LTV: 80%

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    $3,300,000 Owner/User Warehouse Acquisition Financing; 75% LTV; Fixed at 3.36% for 10 Years; San Fernando Valley, CA

    October 23, 2019

    Transaction Description:

    George Smith Partners secured $3,300,000 in proceeds for the purchase of a 19,680 sf warehouse located in the San Fernando Valley. The loan is fixed at 3.36% for 10 years. The Sponsor owns the adjacent property and intends to expand their business into additional warehouse space. Before discussing the deal with lenders, GSP fully underwrote the underlying business and demonstrated its substantial and recurring cash flow. As a result, many lenders were interested in the transaction at 75% LTV, which was above-market leverage for a non-SBA execution. The Borrower was able to select the loan with the best rate and structure. Additionally, the Lender provided an option to pre-pay 20% of the principal balance each year with no penalty.

    Rate: Fixed at 3.36%
    Term: 10 years
    Amortization: 30 years
    Fees: Par
    Prepayment Penalty: Swap breakage
    LTV: 75%