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$10,250,000 Permanent Financing for 100,000 SF Grocery Anchored Shopping Center; Northern California

Rate: 7.88%
Term: 5 Years Fixed
Amortization: Interest Only
LTV: 50%
Prepayment: Defeasance
Lender Fee: 1%
Guaranty: Recourse

Transaction Description:

George Smith Partners arranged 5 year, permanent, non-recourse, interest only financing for an 85% occupied, multi-tenant shopping center in Northern California. The Property is a neighborhood center with 20 tenants and anchored by an independent grocery chain with about 20 locations in 5 states. The grocer has a long history at the center with over 25 years and multiple lease renewals. Other tenants include a mix of local and national chain restaurants, dental care, hair care, and a pre-school. The Sponsor was able to execute new financing near their existing loan maturity. Choosing a 5 year structure allows flexibility in the next 3 or 4 years and minimize prepayment costs. The CMBS financing allowed for a cash-neutral, non-recourse refinance in a volatile capital markets environment.


Related Financings

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    Transaction Description:

    George Smith Partners secured $14,100,000 in permanent financing for the acquisition of a 5,666 square-foot luxury, high-street retail property located at 909 N. Michigan Avenue, in the heart of Chicago’s Magnificent Mile Shopping District. The three luxury retail tenants include Bulgari, Omega Watches, and Chicago’s own Burdeen’s Jewelry. The Sponsor purchased the retail parcel from the owner of the Westin Michigan Avenue Chicago for $27,300,000, approximately $4,818 per square foot.

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    LTV: 50%
    Debt Yield: 15%
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  • Permanent Financing for NNN Single Tenant Retail; Mechanicsburg, PA

    February 1, 2023

    Transaction Description:

    George Smith Partners arranged $3,669,250 in fixed-rate financing to refinance a single-tenant NNN Rite-Aid located in Mechanicsburg, Pennsylvania. GSP sourced a lender that would provide 10-year, fixed-rate debt with no prepayment penalty in order to give the sponsor maximum flexibility. The financing is fixed at 4.98% amortizing over a 30-year period. Rite Aid signed a 26-year lease that expires at the end of the loan term. The tenant’s lease includes four 5-year options at fixed rents.

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    LTV: 65%
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    Origination Fee: 0.25%
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  • $6,100,000 Perm Financing for an Unanchored Retail Property; Bakersfield, CA

    June 22, 2022

    Transaction Description:

    George Smith Partners successfully closed a loan at 60% loan-to-value for an 84% occupied, newly built, and stabilized retail center in Bakersfield, CA. GSP located a lender that was able to lock the rate of 4.125% at application to avoid the rate volatility in the market. Many lenders were not comfortable quoting the deal because of the lack of operating history. GSP was able to locate a lender that was comfortable with the lack of history, with a 6-month debt service reserve held back at closing, to ensure that the tenants continue to pay rent. The reserve is released after 6 months of full rent collection.

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    Term: 7 years
    LTV: 70%
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    Fee: None
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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%
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  • $6,790,000 Permanent Cash Out Financings for Walgreens and Jack in the Box; Murrieta, CA

    June 10, 2020

    Transaction Description:

    George Smith Partners arranged two loans totaling $6,790,000 in permanent financing with over $1,500,000 cash out for a freestanding Walgreens and Jack in the Box located in Antelope Square Shopping Center in Murrieta, California. Both loans are fixed for 5 years at 2.87%, which is one of the lowest fixed rate financings ever closed by GSP. Just as GSP went into application the impacts of Covid-19 resulted in Jack in the Box ceasing rent payments and many capital providers putting a pause on new deals. GSP was able to negotiate a high leverage, cash out refinance with no warm body for carve-outs. The Sponsor also agreed to hold back principal and interest reserves on the Jack in the Box.

    Rate: 2.87% Fixed
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    Prepayment: 3,2,2,1,0
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  • $4,517,000 Acquisition of a Multi-Tenant Retail Center, Villa Park, IL; Non-Recourse

    April 1, 2020

    Transaction Description:

    George Smith Partners secured $4,517,000 for the acquisition of a multi-tenant, retail center in Villa Park, Illinois. The non-recourse permanent loan is fixed at 3.75% for ten years with full-term interest only and a defeasance prepayment penalty structure.

    One of the tenants was a newly opened gym franchise with no historical sales information for this center. Also, during the loan process, the Seller was finalizing a subdivision of the parking lot which required multiple levels of municipality approvals.

    GSP identified a capital source who understood the strength of the asset, the experience of the Sponsor and its desirable suburb location, which is 20 miles outside of Downtown Chicago. The Capital Provider worked through the timing of the issuance of the subdivision approval and was able to close as soon as the approval was finalized. The efficiency of our Capital Provider allowed the Sponsor to be able to rate lock and close as soon as the approval was stamped, taking advantage of the low interest rate environment.

    Rate: 3.75% Fixed for 10 years
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    Amortization: 30 years
    Prepayment Penalty: Defeasance
    DCR: 1.30x
    Interest Only: 10 years
    Guaranty: Non-Recourse
    Origination Fees: Par