Term: 5 Years
Amortization: Interest Only
Guaranty: Non-Recourse, Completion, Repayment, “Bad” Acts and Environmental
Lender Fee: 1.00%
George Smith Partners secured non-recourse bridge financing for a manufacturing facility in California. The Sponsor’s goal was to expand their manufacturing facility from 120,000 s.f. to 200,000 s.f. for their current tenant and provide them with clean manufacturing and dock high loading doors in the warehouse. GSP was able to secure a lender that found the location of the Property desirable due to the close proximity and access to major highways, the Tenant’s long-term investment in the building/equipment and most importantly, the Sponsor’s strong experience and track record.
Gary E. Mozer
Senior Vice President
$44,000,000 Non-participating Bridge Financing for Industrial Acquisition and Reposition, 95% LTC, West Coast
November 25, 2020
George Smith Partners successfully arranged $44,000,000 in non-recourse, non-participating bridge financing at 95% of cost for the lease-up and repositioning of a 5-property, 650,000 SF, industrial complex located on the West Coast. The Sponsor purchased the complex vacant and the seller carried the first mortgage for 4 months. From the open of escrow with the Seller, to the closing of this loan, there was over 82% of the available space leased making up 77% of rent with letters of intent for the remainder of the space. Although this was during the COVID-19 pandemic, and there was considerable deferred maintenance and capital expenditure required to get the properties rent ready, the space leased quickly due to the Sponsor expertise and relationships and a strong submarket.
The loan provides funds for the deferred maintenance, the capital expenditures, the tenant improvements, leasing commission and carry until the tenants are in and paying rent. Additionally, there is an earn-out of $2,000,000 after the 18th month as the asset has other potential value-add attributes.
Rate: LIBOR + 3.95% with a floor on LIBOR of 50 basis points
Term: 3 years interest only
Amortization: Two 1-year extensions with 30-year amortization
Guaranty: Recourse, Completion of deferred maintenance and Cap-Ex, “bad” acts and environmental
Lender Fees: 1% origination and 0.25% exit fee