$13,850,000 Non-Recourse Permanent Loan for a 20-Story Office Building; 4.00% Fixed 4 Years Interest Only, 73% LTV; St. Louis, MO

Rate: 4.00% Fixed
Term: 10 Years
Guaranty: Non-Recourse
Amortization: First 4 Yrs Interest Only, 30 Yr Amort. Thereafter
LTV: 73%
Lender Fee: None

Transaction Description:
George Smith Partners successfully placed a $13,850,000 permanent loan for the refinance of a 213,000 square foot Class A, multi-tenant office building located in the heart of Downtown St. Louis, Missouri. The multi-tenant building has a unique combination of national and local businesses. The Sponsorship has added tremendous value by improving the Property and creating state of the art shared amenities.

The Downtown St. Louis office market has been weak mainly because several buildings fully occupied by Fortune 500 Companies have gone vacant with tenants moving to the suburbs or out of town. Several lenders were concerned about the market and high level of vacancy. In addition, lenders usually only offer interest only payments options with leverage of 60-65%. For this property, the sponsor desired long term low fixed rate non-recourse financing with some interest only, but also required the higher leverage to make the loan work.

With experience in the market, GSP utilized an international relationship lender whom we had completed other complicated office transactions to complete this financing. We overcame the lenders objections by providing detailed market research and access to local experts, which demonstrated to the Capital Provider the strength of multi-tenant office market as compared to the high vacancy in the single tenant downtown office market. Thanks to our understanding of the market and relationship with the Lender, GSP was able to secure 10 Year Non-Recourse fixed rate of 4.00% with 4 years I/O at 73% Loan to value and close the loan in under 30 days.


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    Transaction Description:

    George Smith Partners financed the purchase of a mixed-use retail/office building in Los Angeles, California, last year, using a 1031 exchange. GSP used our vast experience with tax differed exchanges to arrange a cash-out financing with a seven-year fixed rate and is full term interest-only. The cash- out was used to purchase a new property and the Sponsor was able to reinvest their entire exchange in the purchase to differ any taxable gain. The new refinance allowed the Sponsor to pull cash out from the property tax free and use that cash to grow his real estate portfolio. While the cap rate at purchase was very low, the Property’s value will continue to increase due to its location in a great Los Angeles neighborhood. In a traditional loan, the Borrower would be limited on the loan size and cash flow but structuring the full term interest-only loan allowed the Sponsor to achieve positive cashflow and acquire the new asset without issue.

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    Term: Fixed for 7 Years
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    Prepayment: 4,3,2,1
    Guaranty: Non-Recourse
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    $13,370,000 Cash-Out Permanent Financing For a Two-Tenant Research & Development Office Building in Salt Lake City, Utah

    April 11, 2018

    George Smith Partners secured $13,370,000 in cash-out permanent refinancing for a Class A 108,958 SF two-tenant office building in Salt Lake City, Utah. The purpose of the cash-out refinance is to pay off a maturing loan. With strong sponsorship and an experienced real estate investor, GSP identified a lender who was able to get comfortable with 75% loan to value. The loan was funded prior to receiving SNDA, and there was no holdback or reserves. Fixed for 10 years at 4.625%, the loan amortizes over 25 years with no prepayment penalty.

    Rate: 4.625%
    Term: 10 year fixed rate loan
    Amortization: 25 years
    LTV: 75%
    Prepayment: No prepayment penalty
    Guarantee: Recourse
    Lender Fee: Par
    Rate Lock: Free rate lock at signing of LOI for 90 days

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