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Industrial

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    $4,800,000 Permanent Acquisition Financing of Industrial Park; Pflugerville, TX

    February 16, 2022

    Transaction Description:

    George Smith Partners arranged $4,800,000 in financing for the acquisition of a six-building, fully occupied industrial park in Pflugerville, Texas. The Sponsor, a repeat client, was selling another property in which the existing financing had a prepayment penalty. GSP leveraged its strong relationship with the lender of the Property being sold to successfully negotiate a reduction of the prepayment penalty by providing this Lender the opportunity to finance the purchase of the industrial park. The Lender offered a permanent, recourse loan at 3.68% fixed for the first five years based on the original property’s existing loan from 2019. The new loan term is ten years with a 30-year amortization.

    Rate: 3.68% Fixed for first five years
    Term: 10 Years
    Amortization: 30 Years
    LTC: 48%
    Guaranty: Recourse

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    $27,300,000 Non-Recourse Construction Financing for Multi-Tenant Spec Industrial Development; Mesa, AZ

    January 18, 2022

    Transaction Description:

    George Smith Partners arranged $27,300,000 in non-recourse construction financing for the development of a 173,193 SF, Class-A, light industrial project in Mesa, AZ. The Project will consist of smaller unit sizes in 10 total buildings ranging in size from 2,500 to 15,000 SF.

    Challenges:

    This Project was built entirely to spec. Tenants signing smaller leases typically do not pre-lease space before a project breaks ground. Due to supply chain constraints and inflationary pressures, raw materials and labor costs increased significantly. While there have been many large box industrial projects developed in the market, there has been limited development of small bay product and therefore limited comparable lease and sales transactions. Most of the Sponsor team are foreign nationals whose assets lie outside of the United States.

    Solution:

    GSP successfully obtained several financing options and selected a lender who had flexible execution, a strong understanding of the growing demand for small bay industrial space and was comfortable with rising construction prices. GSP arranged a co-guarantor to subsidize the non-recourse carve-out guarantees.

    Rate: L + 6.50% with 0.10% Floor
    Term: 24 months + (1) 6-month extension
    LTC: 80%
    2% origination fee, 0% exit fee

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    $13,000,000 Non-Recourse Construction Financing for a 144,000 SF Industrial Property; Madera, CA

    January 5, 2022

    Transaction Description:

    George Smith Partners successfully arranged the non-recourse, construction financing of a 144,000 SF flex-industrial property in Madera, California. The Property is a 74-unit flex industrial/warehouse that will serve the underserved small-scale user. The Sponsors are capitalizing on the very low vacancy rate in the Madera/Fresno industrial market. The Sponsors are very knowledgeable on the market but have not yet completed a ground-up construction project. Their lack of direct experience and the smaller market made it difficult for many lenders to provide the financing. George Smith Partners was able to educate the selected lender on the need for this product in the market and the industrial experience of the Sponsorship which allowed them to get comfortable with the transaction and provide very favorable financing.

    Rate: 7.00% + LIBOR
    Term: 24 Months with Two Six-Month Extension Options
    LTV: 65%
    LTC: 70%
    Amortization: Full Term Interest Only
    Prepayment: 12 Months’ Minimum Interest
    Guaranty: Non-Recourse

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    $9,000,000 for the Refinancing of a 7,100 SF Office; Southern California & 28,500 SF Industrial Facility; Colorado

    January 5, 2022

    Transaction Description:

    George Smith Partners successfully secured $9,000,000 for the refinancing of two single-tenant assets in Southern California and Colorado. The Southern California industrial property had challenges due to the high dollar per square foot. The Colorado asset had challenges due to the tertiary location. In addition, the tenant for both properties had credit issues.
    Despite the risks associated, GSP was able to successfully navigate these hurdles. This execution is fixed at 4.25% for 5 years and was sized to 75%.

    Rate: SWAP + 3.00% (floor of 4.25%).
    Term: 10 Years
    LTV: 75%

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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