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Retail

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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

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    $25,500,000 Bridge Financing for a 42k SF Landmark Retail Asset; Koreatown, Los Angeles

    August 4, 2021

    Transaction Description:

    George Smith Partners successfully secured $25,500,000 in non-recourse bridge financing for a destination dining and retail center nestled in the heart of Los Angeles’ Koreatown. The 42,000 square foot property is one of Koreatown’s most trafficked retail centers and maintained stable collections throughout 2020. The recapitalization retired the existing debt and provided future funding for capital expenditures, tenant improvements and leasing expenses with no new equity required from the Sponsor.

    The Los Angeles-based sponsorship team acquired the Property in 2016, identifying the asset as a generational heirloom and a unique opportunity to create substantial value. Despite market volatility and COVID-19 related challenges in the retail sector, GSP was able to identify a lender with local knowledge and expertise that understood the importance of this asset within the context of the neighborhood, and the long-term viability of the business model.

     

    All Terms Confidential

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    $2,400,000 Cash-Out Refinance for a Neighborhood Strip Retail Center; North Hollywood, CA

    July 28, 2021

    Transaction Description:

    George Smith Partners successfully arranged $2,400,000 of cash-out on a free and clear neighborhood retail center with an automotive related tenancy in North Hollywood, CA. The subject Property was inherited by a family member and part of the cash out proceeds were used to pay estate taxes with the remaining funds going to the Sponsor and building up a reserve account. GSP went to a variety of lenders and identified a capital provider who was comfortable with the tenant mix, cash-out component, and Sponsor’s real estate experience.

    Rate: 3.875% fixed for 5 years
    Term: 7 years
    Prepayment Penalty: 3,3,3,2,1
    Guaranty: Recourse

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    $10,465,000 Non-Recourse Acquisition Permanent Financing on a 100% Leased Non-Credit-Grocer Anchored Shopping Center; 65% LTPP, 10-years I/O, 3.04% Fixed Rate; Pacific Southwest

    July 21, 2021

    Transaction Description:

    George Smith Partners successfully placed $10,465,000 in non-recourse acquisition permanent financing for a 77,267 square foot, non-credit-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 (including the grocer anchor), 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 purchase price, included 10years of interest-only payments at a fixed rate of 3.04% for 10 years. Lender fee is at par.

    Rate: 3.04%, Fixed
    Term: 10 years
    Amortization: Full-Term Interest Only
    LTV: 65%
    Lender Fee: Par
    Prepayment: Defeasance
    Guaranty: Non-recourse

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    $30,000,000 10-Year Interest-Only, Permanent Financing for 230,000 SF Grocery Anchored Shopping Center; Southern California

    July 21, 2021

    Transaction Description:

    George Smith Partners successfully placed $30,000,000 in permanent fixed-rate financing for a 230,000 SF infill Southern California retail center amidst the COVID-19 pandemic. As a market-leading retail center near local economic and transit hubs, the Property’s mix of need-based and experiential tenants proved resilient. Capital providers continue to be hesitant in financing retail but were specifically concerned with California’s mandates that impacted the operation of non-essential businesses. As non-essential businesses and experiential tenants comprise a significant portion of tenancy, this posed significant challenges. These included the temporary closure of a movie theatre with less than one year of primary lease term remaining and a fitness center that vacated during the pandemic.

    George Smith Partners secured 10 years of permanent financing with full-term interest-only in a financial environment that continues to be cautious towards retail. GSP negotiated competitive pricing at the desired level of proceeds and guided the deal to a successful closing.

    Rate: 10-Year Swap Rate + 185 bps; 3.31% Fixed
    Term: 10 Years
    Amortization: 30 Year, 10-Year Interest-Only
    LTV: 65%
    Prepayment: Defeasance
    Guaranty: Non-recourse except for “bad acts” and environmental

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    $35,000,000 Cash-Out Refinance Anchored Retail with Fitness; Southern California

    June 30, 2021

    Transaction Description:

    George Smith Partners originated a non-recourse cash-out refinance of a Southern California retail center co-anchored by a shuttered fitness center. This location was a top performer in the national chain prior to being mandated to close due to Covid restrictions. Although the fitness center is now opened and operating to partial capacity, the application and due diligence were completed while still dark, as was an adjacent restaurant. The application did not call for holdbacks or reserves for funding as most of the remaining collateral was operational and cash flowing. Sized to 55% of appraised pre-Covid value, the five-year, non-recourse loan was priced at 3.25% on an interest only basis. Debt Coverage Ratio was underwritten on actual collections rather than leased income. A small tenant improvement allowance was reserved at close to address future leasing activity. There is no TI/LC reserve taken from the monthly debt service.

    Rate: 3.25% Fixed
    Term: Five Years
    Amortization: Interest Only
    Loan to Value: 55%
    Debt Coverage Ratio: 1.35 assuming 30 Year Amortization
    Origination Fee: Par
    Prepayment: Defeasance