$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.

Challenge:
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.

Solution:
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.

Advisors

Related Financings

  • Expand

    Abbot Kinney Co-Working Creative Office Conversion Bridge-to-Permanent Financing; Venice, CA

    April 15, 2020

    Transaction Description:

    George Smith Partners placed bridge to permanent financing for the creative office conversion of a co-working space on Abbot Kinney in Venice, California. GSP sourced a lender comfortable with the trophy project’s high basis per square foot and co-working business model. The Project is slated to be the only co-working option on Abbot Kinney, one of the most coveted retail thorofares in Los Angeles. The 4.75% fixed interest rate was locked at application and featured 24 months of interest only followed by 25-year amortization for the remaining 5-year term. The loan was recourse to an entity, as no warm body was available and carries no prepayment penalty.

    Rate: 4.75% fixed (locked at application)
    Term: 7 Years
    Amortization: Interest only for 24 Months; 25-year amortization thereafter
    Yield Maintenance: None
    Recourse: Entity-level only

  • Expand

    $3,000,000 Permanent Financing for a Ground Lease Single-Tenant Office Building; Irvine, CA

    December 18, 2019

    Transaction Description:

    George Smith Partners successfully arranged $3,000,000 in a cash-out permanent refinance secured by the sandwich leasehold interest in a single-tenant leased office building in Irvine, California. The Subject Property is in the heart of Orange County’s business district and next to the Irvine Business Complex and John Wayne Airport. The neighborhood is in a mature stage with limited amount of vacant land available for new development. The Property consists of three multi-story buildings having 69,474 SF net rentable space.

    The Subject Property is encumbered by a ground lease. The leasehold interest, ground lease, and tenant improvement lease all expire in five years, with no extension options. The non-investment grade tenant has a six year lease remaining and they are not required to provide business financials.

    GSP identified a capital provider able to structure a five year fully amortizing loan. The Sponsor’s considerable real estate track record and financial strength further encouraged the Lender to provide a low interest rate. The recourse loan is fixed at 3.00% with a 5-year term and will be fully amortized in five years.

    Rate: 3.00% fixed
    Term: 5 years
    Amortization: 5 years
    Loan to Value: 44%
    Global DSCR: 1.25X
    Prepayment: 3%, 2%, 1%
    Guaranty: Recourse
    Lender Fee: Par

  • Expand

    $3,900,000 Cash-Out Permanent Financing with Full Term Interest-Only After Exchange; Los Angeles, CA

    July 2, 2019

    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.

    Rate: 4.9%
    Term: Fixed for 7 Years
    Amortization: Full Term Interest only
    LTV: 70%
    Prepayment: 4,3,2,1
    Guaranty: Non-Recourse
    Lender Fee: None

  • Expand

    $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

Don't Miss a Fact,
Sign Up for FINfacts!

FINfacts is a weekly newsletter highlighting recent financings and economic insights.

Subscribe Here