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Retail

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    $4,875,000 Acquisition Financing for an 88% Occupied Neighborhood Strip Center; Ventura County, CA

    May 4, 2022

    Transaction Description:

    George Smith Partners successfully arranged $4,875,000 in acquisition financing for a non-grocery anchored retail shopping center in Ventura County. The Subject Property took a minor hit with rent collections during the Covid-19 pandemic and had many month-to-month tenants. GSP was able to illustrate to the Capital Provider how the Subject Property has rebounded nicely since then and has only been increasing in cash flow. GSP identified a Capital Provider who was comfortable with the mom-and-pop tenants, required no holdbacks of any sort for the vacant units, required no deposits to be held at their branch and provided a flexible prepayment penalty structure.

    Rate: 4.00%
    Term: 5 years fixed
    Amortization: 30 years
    LTV: 65%
    Prepayment Penalty: 5/4/3/0/0
    Banking Relationship/Deposits Required: None
    Guaranty: Recourse

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    $6,200,000 Non-Recourse Construction Loan for 27,300 SF, 100% Pre-leased Shopping Center; Moreno Valley, CA

    March 22, 2022

    Transaction Description:

    George Smith Partners successfully arranged $6,200,000 in non-recourse construction financing for a 100% preleased, 27,300 SF grocery-anchored shopping center in Southern California. Positioned in a strong retail corridor with high traffic counts, the Sponsor assembled a stellar mix of tenants, two of which were on ground-leases, and the other two requiring build-to-suits. With highly experienced Sponsorship, the Project was significantly de-risked with signed leases and approvals for a tentative parcel map. As a result, GSP was able to source competitive financing with exceptionally high leverage that co-align with the Sponsor’s investment plan and market outlook.

    Rate: 8.00%
    Term: 18 months + two 6-month options
    LTC: 90%
    Guaranty: Non-Recourse

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    $3,000,000 Non-Recourse Acquisition Loan for 20,000 SF Office/Retail Building; Sacramento, CA

    March 16, 2022

    Transaction Description:

    George Smith Partners successfully arranged $3,000,000 in acquisition financing for a 20,000 SF office/retail single story building in Sacramento. The Seller will occupy the Property paying no rent but will cover the operating expenses until the client provides 90 days’ notice to vacate. Centrally located in Midtown Sacramento, the Sponsor purchased the property for its land value, as they will entitle and assemble adjacent properties to be developed into a new ground-up multifamily project. Requiring a three-week closing timeline over the holiday season, George Smith Partners successfully sourced financing within the tight schedule.

    Rate: 6.40%
    Term: 18 months
    LTC: 60%
    Guaranty: Non-Recourse

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    $29,250,000 Senior Construction Financing for a Mixed-Use Development; Bellflower, CA

    February 16, 2022

    Transaction Description:

    George Smith Partners placed a $29,250,000 senior construction loan for a ground-up development of a mixed-use project in Bellflower, CA. When complete, the 5-story Project will consist of 91 apartment units and approximately 14,550 SF of 1st-floor commercial/retail/restaurant space. The Subject is located at the northern boundary of the Downtown Bellflower District and is an integral component of the city’s TOD Specific Plan. When complete, residents will be able to access LAX, the South Bay, and DTLA via the Blue and Green Metro lines.

    As the marquee development for the Bellflower TOD Specific Plan, few comparable projects were available in proximity to the Project site. GSP focused interested lenders on the supporting employment centers within a twenty-minute driving distance, including seven medical centers inside of a 5-mile radius. Additionally, while few Class-A style multifamily properties currently exist near the site, GSP used submarket data to show that demographic trends within the immediate area support the need for new product. GSP executed a broad and in-depth marketing campaign to help capital markets understand the opportunity.

    Rate: Prime + 0.75%; Floor 4.375%
    Term: 24 Months + three, 6-Month Extension
    Stabilized Loan-To-Value: 65%
    LTC: 72%

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    $27,000,000 Non-Recourse Financing with Cash Out for 360,000 SF Retail Center; Colorado Springs, CO

    December 15, 2021

    Transaction Description:

    George Smith Partners has secured $27,000,000 in non-recourse debt financing for a 360,000 SF retail center in Colorado Springs, CO. The Property features many popular national retail and restaurant chains and is shadow anchored by Lowe’s Home Improvement. Due to some pandemic related tenant credit issues the Property faced 68% occupancy levels for a brief period. However, through strategic releasing efforts, the Property has since been released to strong new tenants for over 90% of the net leasable area.

    The loan was structured to provide fresh reserves for the Sponsor to pay remaining tenant improvement and leasing commissions for the newly tenanted spaces as well as to refinance the existing bridge loan, which had reached maturity. In addition, the Lender provided the Sponsor with additional cash-out proceeds to pay down debts on other Sponsor-owned properties.

    Challenges:

    The Sponsor originally requested long-term fixed rate debt with maximum cash out. However, due to the near-term maturity of the existing bridge loan and the non-stabilized NOI, another bridge loan was needed to allow the NOI to season for another year, prior to arranging permanent financing.

    Solutions:

    The GSP team was able to solve for these challenges by highlighting the increased leasing activity since the pandemic as well as the Sponsor’s forty-year history and familiarity with the Property. GSP identified a new bridge lender comfortable with the Property’s dominant position in the market, the recent leasing activity and future leasing potential. GSP worked creatively and strategically with the Lender to structure an 18-month loan with two extension options. This will allow the new tenants to take occupancy. In addition, the NOI will be able tore-stabilize which will position the Property to achieve permanent financing as an exit strategy to repay the new bridge loan.

    Rate: 9.0% Fixed, Interest Only for 6 Months
    Term: 18 Months, with two 6-Month Extension Options
    LTV: 65% (Plus CAPEX)
    Origination: 1.75%
    Guaranty: Non-Recourse

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    $16,100,000 Cash-Out Permanent Financing for a Theater Anchored Shopping Center; Dardenne Prairie, MO

    November 29, 2021

    Transaction Description:

    George Smith Partners arranged the cash-out permanent refinance of a 153,726 SF grocery-anchored retail community center in Dardenne Prairie, MO, about 30 miles west of St. Louis. The Subject Property is anchored by Schnucks and Marcus Theater and is also shadow anchored by Target, which is under separate ownership. The loan is sized to 62% LTV, fixed for 5 years with 20 years amortization.

    The Sponsor approached GSP to arrange a non-CMBS loan resulting in $4,000,000 cash-out. The proceeds were used to buy-out his partners and lower the debt service from their previous loan. The theater component, along with a decreased appetite for retail lending due to market conditions made it difficult for capital providers to get comfortable with the asset type and cash-out. GSP identified a lender who was willing to provide a higher loan to value and competitive terms that maximize the Sponsor’s cash-out.

    Rate: 3.95%
    Term: 5 year fixed rate
    Amortization: 20 Years
    Loan to Value: 62%
    Prepayment: 2,1,0
    Guaranty: Full Recourse

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    $9,345,500 Acquisition Financing for 3 Single Tenant Drug Stores (2 CVS and 1 Walgreens)

    October 6, 2021

    Transaction Description:

    George Smith Partners arranged 3 separate loans with a single portfolio lender for our Sponsor’s acquisition of 3 drug stores from 3 different sellers. Timing was critical as 2 of the Property acquisitions were part of a 1031 exchange nearing the deadline. The fixed rate financing with no prepayment gives the Sponsor maximum optionality with no rate risk. The Sun City Seller had to delay closing due to a defeasance issue. This resulted in a mid-process strategy shift. That property was removed from the exchange and the Omaha property was added to the exchange. GSP worked with the Lender and all counsels to have those 2 loans re-documented with new ownership structures to accommodate the exchange.

    CVS – Sun City, AZ
    20-year lease term
    Loan Amount: $2,372,500
    Rate: 3.29%
    Term: 10 years, rate adjusts after year 5
    Amort: 30 years
    LTV: 67%
    Prepayment: Prepayable anytime at par
    Guaranty: Recourse
    Lender Fee: 0.25%

    Walgreens – Omaha, NB
    15-year lease term
    Loan Amount: $4,410,000
    Rate: 3.74%
    Term: 10 years fixed
    Amort: 30 years
    LTV: 67%
    Prepayment: Prepayable anytime at par
    Guaranty: Recourse
    Lender Fee: 0.25%

    CVS – Davenport, IA
    12-year lease term
    Loan Amount: $2,563,000
    Rate: 3.29%
    Term: 10 years, rate adjusts after year 5
    Amort: 30 years
    LTV: 67%
    Prepayment: Prepayable anytime at par
    Lender Fee: 0.25%

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    $18,450,000 Permanent Financing for a 122,000 SF Grocery Anchored Shopping Center; Northern California

    October 6, 2021

    Transaction Description:

    George Smith Partners successfully placed $18,450,000 in permanent financing on a 122,000 SF grocery anchored shopping center located in Northern California amidst the COVID-19 pandemic. The Center is anchored by a 32,000 SF Smart & Final, a 26,000 SF Ross Dress for Less and a 22,000 SF Planet Fitness. Despite tenants demonstrating commitment to the space—with an average lease term of 15 years and consistent renewals—capital markets were cautious of financing retail and were specifically concerned with COVID-19 rent deferrals and closures due to the California directives and mandates. Furthermore, capital providers expressed uncertainty as to how retail centers would be impacted in the long run and the ramifications of the future post-pandemic retail environment. GSP was able to ensure competitive pricing and proceeds based on having a best-in-class sponsor and strong and diverse anchors, despite being in a cautious financial environment hesitant towards retail.

    Rate: SWAP + 193
    Term: 10 Years
    Amortization: 10 Years Interest Only
    LTV: 65%
    Guaranty: Non-Recourse

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    Permanent Refinance of Sonic Drive-In; Rialto, CA

    September 29, 2021

    Transaction Description:

    George Smith Partners arranged $1,300,000 in take-out financing for a fast-food restaurant, Sonic Drive-In, located in Rialto, CA. The Property was built at the end of 2019, consisting of 2,727 SF with a total of 16 drive-in ordering stations on a 38,967 SF parcel. The Sponsor, a repeat client, acquired the raw unentitled land in mid-2019 and the take-out financing was used to pay off the existing lender. The Property is on a ground lease, which posed a challenge and limited the number of interested lenders. The vast pool of relationships GSP has access to helped overcome this and enabled us to execute on a long-term solution.

    Rate: 4.125% Fixed for 10 Years
    Term: 25 Years
    LTV: 50%
    Prepayment: Yield Maintenance
    Guaranty: Full Recourse

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    $4,030,000 Non-Recourse Bridge Acquisition Financing for 44% Occupied Retail Center; Tempe, AZ

    September 29, 2021

    Transaction Description:

    George Smith Partners secured $4,030,000 of bridge financing for the acquisition of retail shop space in Tempe, AZ. The collateral encompassed approximately 30,000 sf of in-line retail space and an outparcel pad within a larger anchored retail center. At purchase, the collateral was only 44% occupied. The Sponsors believe that a new leasing strategy will be able to drive tenants to the Center. The Property is located on one of the corners of a major intersection that sees over 65,000 cars per day and is less than two miles from Arizona State University, one of the largest universities in the country. The capital provider structured the financing to have a holdback for future property improvements, leasing costs, and interest payments. Priced at 30-Day LIBOR + 7.00%, the non-recourse loan was sized to 68% of total cost and carries a two-year term with extensions. The Lender was also able to include partial releases if only a portion of the collateral is sold.

    Rate: L + 7.00% (0.25% LIBOR Floor)
    Term: 2 Years with Two 6-Month Extensions
    Loan-to-Cost: 68% LTC
    Amortization: Interest Only During Initial Term
    Guaranty: Non-Recourse with Standard Carveouts

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    $42,400,000 (80% LTC) Bridge Financing for a 26-Property Portfolio of Walmart Shadow-Anchored Shopping Centers; Located Throughout the Midwest and South

    August 25, 2021

    Transaction Description:

    George Smith Partners successfully placed $42,400,000 in non-recourse bridge debt financing, which funded 80% of total project costs for the acquisition and value-add business plan of an off-market, 26-property retail portfolio spread across 19 midwestern and southern states. Although financing retail value-add business plans during COVID is challenging, the portfolio is comprised of a diversified rent roll including 20% of gross potential rent derived from investment-grade tenants. Furthermore, each asset within the portfolio is shadow anchored by strong performing corporate owned Walmart grocery shopping centers.

    GSP leveraged its lender relationships and capital markets expertise to source a lender who understood the business plan and product type, who was willing to invest the time and effort to underwrite a large retail portfolio spread throughout 19 different states, and in markets with average populations below 30,000; during COVID.

    Rate: L + 5.05% (5.10% floor)
    Term: 3+1+1
    Amortization: 24-months I/O, 25-year amortization thereafter
    LTV: 76% As-stable loan-to-value
    Lender Fee: 1% in / 1% out (waived if CMBS exit through Lender)
    Prepayment: 18-months minimum interest with pre-negotiated release provisions for each property and with open prepayment on certain assets identified prior to close
    Guaranty: Non-recourse

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    Cash-Out 2.94%, $12,025,000 Non-Recourse Permanent Refinance on a 100% Leased Discount-Grocer Anchored Shopping Center; Western States

    August 4, 2021

    Transaction Description:

    George Smith Partners successfully placed $12,025,000 in non-recourse, cash-out permanent refinancing for a 101,096 square foot discount-grocer anchored retail shopping center in a transitory Pacific Southwest MSA. The tenant mix includes several national credit tenants along with local and regional stores, all of which remained in-place during COVID-19. GSP was able to identify a lender who understood the complexities of retail in a post COVID environment. The non-recourse permanent loan was sized to 65% of value, included 10-years of interest only payments at a fixed rate of 2.94% for 10 years. Lender fee is at par.

    Rate: 2.94%, Fixed
    Term: 10 years
    Amortization: Full-Term Interest Only
    LTV: 65%
    Lender Fee: Par
    Prepayment: Defeasance
    Guaranty: Non-recourse