$13,500,000 Non-Recourse Bridge-to-Bridge Loan with a Cannabis User at 6.90%; Echo Park, CA

Rate: 6.90%
Term: 12-month term with one 12-month extension option
LTV: 60%
Guaranty: Non-recourse

Transaction Description:

George Smith Partners arranged $13,500,000 in quick-close, cash out, bridge-to-bridge financing for a multitenant retail center in Echo Park, California. The Sponsor approached GSP with intentions of taking out their existing lender due to an issue with lease approval for a cannabis tenant. In order to purchase an outparcel on the Property, the cannabis user needed a lease in place so it could obtain a license from the local jurisdiction. If approvals were not granted, the Sponsor would have the ability to break the lease. GSP identified a non-bank lender who was comfortable approving a lease on a space which may never be occupied. The Lender’s flexible prepayment structure allowed the Sponsor to execute their business plan as the cannabis tenant planned to acquire an outparcel on the Property after receiving approvals from the City. The first trust deed was sized to 60% of value with no hold back requirement for interest reserve or capital expenditures. The non-recourse, interest only loan does not carry any prepayment penalties. The Sponsor plans to take out the loan within 12 months with long-term fixed rate debt.

Advisors

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  • Expand

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