February 24, 2021
George Smith Partners placed the cash-in refinance of a net-leased single tenant office building located in a secondary Milwaukee metro-market. Although currently leased to one user, the asset is easily divisible should the tenant choose to exercise their early termination clause in 18 months. Our Portfolio Capital Provider mitigated this event risk in two ways. First, by underwriting the need of the current tenant to operate from this specific single tenant building and second, our Sponsors’ 15% additional capital contribution at close. A personal repayment guarantee was used in place of all escrows, reserves, cash flow sweeps and hold-backs. The tenant continued to operate from this location in a reduced capacity throughout Covid. The 10-year term is fixed at 3.625% and amortizes over 25 years. The net-lease was underwritten to preclude any tax or insurance impounds while this tenant is in occupancy.
January 6, 2021
George Smith Partners successfully arranged a $4,400,000 refinance of two flex buildings, totaling 68,169 SF, in Jacksonville, FL. This was a permanent, recourse loan at 3.75%, fixed for the first 10 years with a rate reset at every 10 years thereafter. This is a fully amortizing 25-year loan. The two buildings are adjacent to each other and offer a mix of flex, office and retail space. Both buildings are currently 100% occupied with minimal impact of COVID-19 on its tenants. The Sponsor, a repeat client, acquired the Property just a month prior and engaged GSP to capitalize on the low interest rate environment.
December 9, 2020
George Smith Partners arranged $8,000,000 in non-recourse financing for the refinance of a vacant office building in Culver City which had just completed an extensive renovation into creative office. The Sponsor purchased the two-story building over 15 years ago as an owner-user. He invested significant capital to improve the building and create a modern creative office property that would appeal to creative office users in the technology and media industries attracted to Culver City. Prior to the pandemic, the Sponsor was negotiating with multiple tenants to occupy the building. These potential tenants paused on negotiations and the Sponsor had to quickly refinance his construction loan with a new bridge loan to allow him more time to lease-up.
GSP accomplished the Sponsor’s goal to refinance the existing loan with a facility that is pre-payable at any time. This facility allows the Sponsor to lease up the remaining vacant space and refinance with a long-term loan in the next 6-12 months and it also provides additional funds for tenant improvements. GSP was able to identify a local lending source that not only understood the market and demand for office space in Culver City but also understood the overall value of the Property.
November 25, 2020
George Smith Partners secured a senior bridge loan for a 21,303 square foot office building in Laguna Niguel, CA. The Subject Property was unencumbered; hence the entire loan was comprised of cash-out proceeds which the Borrower is utilizing for a separate project they are developing. The loan represents approximately 60% of the original purchase price and was structured with a 1-year initial term with interest only payments. The loan allows for open prepayment and carries two 6-month extension options.
The loan was collateralized by a recently renovated 21,303 square foot office building. The building had recently upgraded the facade, landscaping, parking lot, entrance, lobby, bathrooms, HVAC and other interior finishes. A new roof and solar system had also been installed. The building was 47% occupied at loan funding. The first-floor single tenant had vacated at lease expiration several months prior leaving limited debt service coverage and unusually high vacancy compounded by other COVID related issues.
GSP selected a lender that was able to move incredibly quick to accommodate the Borrower’s development timeline. The Lender’s credit department approved the loan one-week post submission and did not require an appraisal to close. The Lender underwrote to the stabilized asset value, closed with no debt service reserve and no personal recourse.
September 16, 2020
George Smith Partners placed the non-recourse refinance of a Southern California single-tenant office and instruction center owned and operated by a 501c3 approved charity. This office is configured for classroom training, instruction and traditional administrative office use. Deemed an essential business, operations were never delayed as a result of the COVID-19 pandemic. Due to the ownership structure, there is no recourse or carve-out guarantees beyond the charity entity. The cash neutral loan financed all closing costs and reduced the Borrowers’ mortgage constant by 190 basis points for significantly improved cash flow.
April 15, 2020
George Smith Partners placed bridge to permanent financing for the creative office conversion of a co-working space on Abbot Kinney in Venice, California. GSP sourced a lender comfortable with the trophy project’s high basis per square foot and co-working business model. The Project is slated to be the only co-working option on Abbot Kinney, one of the most coveted retail thorofares in Los Angeles. The 4.75% fixed interest rate was locked at application and featured 24 months of interest only followed by 25-year amortization for the remaining 5-year term. The loan was recourse to an entity, as no warm body was available and carries no prepayment penalty.
Rate: 4.75% fixed (locked at application)
Term: 7 Years
Amortization: Interest only for 24 Months; 25-year amortization thereafter
Yield Maintenance: None
Recourse: Entity-level only
- Advisors: Zachary Streit
$61,392,000 Refinance of a 207-Acre, Two Million Square Foot Pharmaceutical Campus in Tri-State Area
April 15, 2020
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%
- Advisors: Gary E. Mozer
January 21, 2020
George Smith Partners arranged $16,000,000 in non-recourse financing to refinance and provide cash-out on a 119,000 SF Class-B office building located in Brea, CA, off one of the most densely trafficked business arteries in the area. The Property, built-in 1982, has been well maintained and has historically achieved above-market occupancy. The Sponsor’s goal was to refinance the existing loan with a facility that included a cash-out component to bolster the partnership’s returns. This facility allows the Sponsor to lease up the remaining vacant space and exit the investment through a sale to a third party in the next 6-8 months, all the while returning significant equity to the Sponsors today.
GSP focused on the extensive history of strong market demand in the Brea/Orange County market and was able to explain to capital sources the Property’s history of near full occupancy. GSP was able to identify a local lending source that not only understood the market and demand for office space in greater Orange County, but also understood the overall value of the Property and the subsequent loan that was procured.
December 18, 2019
George Smith Partners successfully arranged $3,000,000 in a cash-out permanent refinance secured by the sandwich leasehold interest in a single-tenant leased office building in Irvine, California. The Subject Property is in the heart of Orange County’s business district and next to the Irvine Business Complex and John Wayne Airport. The neighborhood is in a mature stage with limited amount of vacant land available for new development. The Property consists of three multi-story buildings having 69,474 SF net rentable space.
The Subject Property is encumbered by a ground lease. The leasehold interest, ground lease, and tenant improvement lease all expire in five years, with no extension options. The non-investment grade tenant has a six year lease remaining and they are not required to provide business financials.
GSP identified a capital provider able to structure a five year fully amortizing loan. The Sponsor’s considerable real estate track record and financial strength further encouraged the Lender to provide a low interest rate. The recourse loan is fixed at 3.00% with a 5-year term and will be fully amortized in five years.
Rate: 3.00% fixed
Term: 5 years
Amortization: 5 years
Loan to Value: 44%
Global DSCR: 1.25X
Prepayment: 3%, 2%, 1%
Lender Fee: Par
- Advisors: Gilda Rivera
December 18, 2019
George Smith Partners placed an $11,895,000 cash-out refinance of a 100% owner/user corporate office and assemblage facility in Orange County, California. Excess proceeds were used to address a loan maturity for other unrelated real estate. The other assets are not stabilized but located in primary in-fill Los Angeles markets. Although proceeds were allocated to other real assets our Capital Provider only collateralized the Subject Property. Our Capital Provider sized this request to 65% of appraised value and fixed the rate at 3.88% for 5 years. It was extremely important for our Sponsor to have permanent financing that carries a step-down pre-payment penalty from 5%.
December 18, 2019
George Smith Partners arranged $25,500,000 in non-recourse bridge financing for the acquisition of a 230,000 square foot Class A office building located in the heart of Phoenix, Arizona’s Midtown District. Positioned on a heavily trafficked thoroughfare of a major professional corridor, the site benefits from its central location, proximity to Downtown Phoenix and abundance of local economic drivers. The Project, built in 1982, had been well-maintained but was running a below-market occupancy rate of 82% due to the recent expiration of a large tenant lease. This bridge facility allowed the Canadian-based Sponsor to purchase the asset and undergo a proposed renovation, bringing the design up to competitive market standards in order to successfully lease-up and stabilize the asset.
By focusing attention on sophisticated bridge lenders active in the local area, GSP identified a capital provider who understood the growth of the market. The selected Capital Provider structured around the Project’s current vacancy, recognizing the strength of the Sponsor and their ability to successfully execute on the intended business plan of value creation. The loan was structured with minimal cash management language and featured pari passu funding throughout the term. The interest only non-recourse bridge loan was priced at a spread of 350 basis points over the 30-Day LIBOR, with a three-year term and two 12-month extension options.
October 30, 2019
George Smith Partners successfully arranged $1,500,000 of rate and term refinancing for a multi-tenant office building in Santa Monica, CA. The Property was constructed in 1975, and it has been recently renovated with 6,256 sf net rentable area. The Property is conveniently located near Santa Monica College, Downtown Santa Monica, and it is less than two miles away from Santa Monica State Beach. Santa Monica has been and still is one of the most highly sought-after office locations in the Los Angeles area by tenants and investors. The submarket has very significant supply constraints, though rental rates are lagging the metro average. The purpose of the refinance is to pay off the existing debt and take advantage of the low interest rate environment.
The Sponsor is self-managing the Property. They renovated the units recently and brought the rents up to market rate. The Building was 100% occupied by local and non-credit tenants at closing. All of the leases will roll within the first three years of the loan term.
GSP sourced a lender who is willing to offer a 7-year permanent loan term, without holding back Tenant Improvement and Leasing Commissions reserves. The loan is sized to 31%LTV, it has a fixed coupon of 3.46% with a 25-year amortization schedule.
Rate: 7-year LIBOR + 2.10% (all-in rate 3.46%), no floor
Term: 7 year fixed
Amortization: 25 years
Loan to Value: 31%
Prepayment: 5%, 4%, 3%, 2%, 1%
Lender Fee: Par
- Advisors: Gilda Rivera
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