TD Rate: 4.978% Fixed for 10 Years
Term: 20 Years
Amortization: 25 Years
TD Term: 25 Years
Amortization: 25 Years
Combined LTC: 85%
George Smith Partners arranged a SBA 504 financing for a recently renovated single-tenant, creative office building in Glendale, CA. The Property will become the new headquarters for the Sponsor’s company. GSP leveraged its long-standing relationships with an institutional SBA lender and a leading Certified Development Company (CDC) to structure and close at 85% LTC. Though the appraisal value came in below the initial purchase price, GSP offered additional market analysis and local area expertise that helped the Sponsor negotiate a reduced price of nearly half a million dollars.
Managing Director & Principal
Assistant Vice President
$19,570,000 Non-Recourse Acquisition Bridge Financing for a 163k SF Office Campus; Ventura, Los Angeles, CA
November 29, 2021
George Smith Partners successfully secured $19,570,000 in senior acquisition debt financing for a 4-building, garden style office campus located in Ventura. Situated on a rare 7.72-acre infill site, the Property consists of 162,717 net rentable square feet across the 4 buildings and is within walking distance to the high-traffic retail hubs, Mills Street, and the Pacific View Regional Mall. The financing capitalized the Property acquisition as well as a focused capital expenditure program aimed at increasing operational efficiencies and targeted deferred maintenance.
Despite COVID-19 related challenges in the office sector, the Property maintained 70% occupancy through its granular tenant base. While some lenders expressed concern with the going-in debt yield and market leasing dynamics, GSP broadly marketed the Project and was able to identify a lender who understood the underlying value of the asset, the Sponsor’s business plan, and Ventura’s fast-growing market. The interest-only financing was sized to 70% loan to cost, including 100% of future funding for capital expenditures, tenant improvements and leasing commissions. The loan carried a 3-year term and was priced at 1 Month Libor + 500 basis points with a 5.15% floor. Due to an excellent purchase price, the financing had a very tight closing timeframe, and the selected Lender was able to close in 30 days from term sheet execution.
Rate: L+500 (5.15% floor)
Term: 3 Years (Two 12-Month extensions)
Interest-Only: Full Term
April 14, 2021
George Smith Partners arranged $2,450,000 in SBA Owner-User Acquisition (90% Loan-to-Purchase Price) financing for an office/industrial flex property located in North Hollywood, CA. The Sponsor approached GSP to assist with the acquisition of the Property to relocate their company headquarters. The Sponsor required a flexible loan with high leverage and a low interest rate. The Sponsor had already entered escrow at the time of approaching GSP and was on a strict timeline with only 60 days to close. GSP quickly and successfully structured a first trust deed from a bank as well as an SBA B-piece to secure 90% of the purchase price. GSP was able to provide the Sponsor with a 25-year term, with the first 10 years fixed at a blended rate of 3.80%. The flexible prepayment structure is equal to 5-5-4-4-3-3-2-2-1-1. The high leverage loan allows the Sponsor to use equity towards the continued growth of their business. Thanks to our long-standing relationship with the SBA Certified Development Company (CDC), GSP was able to meet the Sponsor’s deadline and close this transaction in under 60 days.
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.
Rate: 30 Day LIBOR + 3.50%
Term: 36 Months with Two 12-Month Extensions (3+1+1)
Amortization: Interest Only
- Advisors: Evan Kinne
$15,400,000 Non-Recourse Acquisition Financing for Office Tower; 3.68%; 70% LTV; 10 Year Interest Only; San Fernando Valley, CA
August 14, 2019
George Smith Partners secured $15,400,000 in non-recourse acquisition financing for an office tower located in the San Fernando Valley. The loan is fixed at 3.68% for 10 years with full term interest only payments. The proceeds represent 70% of the acquisition price.
The Property has over 40 tenants and many leases will roll within the next 2-3 years. Shortly before the PSA was signed, a major tenant moved out resulting in vacancy of 10%. The Property receives income both from cell tower leases and excess parking capacity, but many lenders do not give credit for these types of revenue. The seller included both regular operating expenses and capital expenditures in the historical P&Ls.
GSP demonstrated that the Property had historically high occupancy above 95% and provided data that demonstrated the strength of the local office market. This made the Lender comfortable with the short term leases and the temporary increase in vacancy. Additionally, while the loan was in application, the Sponsors signed a new lease to bring occupancy back up. The Lender did not require seasoning on this new lease. The Lender was able to include cell tower and parking income based on the historical P&Ls. Finally, GSP obtained the Seller’s general ledgers and was able to separate out major capital expenditures from the P&Ls. The Lender was ready to move quickly and close in about 30 days, but the Seller requested an extension and the loan closed about 50 days from application.
February 20, 2019
George Smith Partners secured $5,550,000 for the acquisition of a 129,861 square foot multi-tenant industrial/office building located in a suburb of Atlanta. Constructed in 1998, the building was completely renovated in 2017. The space was divided into three and re-tenanted with local companies. Fixed at 5.15% for ten years, the non-recourse loan has 3 years of interest only payments, followed by a 30-year amortization.
Prior to the renovation, the building was occupied by a single tenant. The tenant vacated while the Property was under renovation, resulting in a gap in the historical P&Ls. The newly renovated property had less than one year of cash flow seasoning and three recently signed leases. Although the new NNN leases are for 10 year terms, they contain termination options. The Buyer requested to have only the borrowing entity sign as the carve out guarantor on the non-recourse Guaranty.
GSP worked with a Lender that understood the strength of the asset and the submarket. The limited occupancy history was addressed by emphasizing the strength of the newly signed Tenants and the appraisal provided further support for the stability of future cash flow. As a result, the Lender was able to utilize the short operating history and approve an entity to sign on the carve out, without the requirement for a warm body guarantee.
$22,050,000 Non-Recourse, Acquisition and Development Financing to Reposition a 100,000 Square Foot Mixed-Use Building in Phoenix, AZ
February 20, 2019
George Smith Partners secured $22,050,000 of non-recourse acquisition and development financing for the reposition of a 100,000 square foot mixed-use office building and a 334 stall parking garage located in the Roosevelt Row Art’s District of Downtown Phoenix. The main tenant of the building recently vacated, leaving the Property with low occupancy. The Sponsor was able to acquire the asset with LOI’s for several large tenants in tow. The business plan was to reposition and stabilize the remainder of the mixed-use building after executing the leases shortly thereafter.
Sized at 70% of total project costs, the loan includes a future funding facility to cover tenant improvements and leasing commissions. The rate floats at 30 Day LIBOR plus 6.85% and carries a two year term with a one year extension option. The Lender was able to underwrite and deliver an executable term sheet in less than 48 hours. The loan funded roughly three weeks from the date of the application, meeting the required short window for closing. The Sponsor was also given occupancy credit based on the LOI’s, with executed leases allowed as a post-closing item. This offered the Sponsor more time to negotiate more favorable lease terms.
Term: 2 yrs +1 yr extension
LTV: 75% (70% LTC)
- Advisors: Evan Kinne