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$14,100,000 Permanent Acquisition Financing for High Street Retail Property; Chicago, IL

Rate: 6.75% Fixed (Index + 2.77%)
Term: 5 Years
Interest-Only: Full Term
LTV: 50%
Debt Yield: 15%
Guaranty: Non-Recourse

Transaction Description:

George Smith Partners secured $14,100,000 in permanent financing for the acquisition of a 5,666 square-foot luxury, high-street retail property located at 909 N. Michigan Avenue, in the heart of Chicago’s Magnificent Mile Shopping District. The three luxury retail tenants include Bulgari, Omega Watches, and Chicago’s own Burdeen’s Jewelry. The Sponsor purchased the retail parcel from the owner of the Westin Michigan Avenue Chicago for $27,300,000, approximately $4,818 per square foot.

During the closing process, the capital markets experienced considerable volatility with the fallout from Silicon Valley Bank and First Republic Bank causing a seismic shift to the debt markets prior to funding of the loan. George Smith Partners was able to hold proceeds on the loan and closed the 5-year fixed rate note with full-term interest only by leveraging our lender relationships and augmenting with appropriate structure.


Related Financings

  • $4,517,000 Acquisition of a Multi-Tenant Retail Center, Villa Park, IL; Non-Recourse

    April 1, 2020

    Transaction Description:

    George Smith Partners secured $4,517,000 for the acquisition of a multi-tenant, retail center in Villa Park, Illinois. The non-recourse permanent loan is fixed at 3.75% for ten years with full-term interest only and a defeasance prepayment penalty structure.

    One of the tenants was a newly opened gym franchise with no historical sales information for this center. Also, during the loan process, the Seller was finalizing a subdivision of the parking lot which required multiple levels of municipality approvals.

    GSP identified a capital source who understood the strength of the asset, the experience of the Sponsor and its desirable suburb location, which is 20 miles outside of Downtown Chicago. The Capital Provider worked through the timing of the issuance of the subdivision approval and was able to close as soon as the approval was finalized. The efficiency of our Capital Provider allowed the Sponsor to be able to rate lock and close as soon as the approval was stamped, taking advantage of the low interest rate environment.

    Rate: 3.75% Fixed for 10 years
    Term: 10 years
    Amortization: 30 years
    Prepayment Penalty: Defeasance
    DCR: 1.30x
    Interest Only: 10 years
    Guaranty: Non-Recourse
    Origination Fees: Par

  • Low Debt Yield, 3.77% Coupon Permanent Financing for the Acquisition of a Recently Developed Grocery-Anchored Retail Center; FL

    September 25, 2019

    George Smith Partners successfully placed $14,690,000 in non-recourse, ten-year fixed rate first mortgage debt for the acquisition of an approximately 54,000 square foot, 96% occupied, recently developed retail center in Western Florida. An investment-grade grocery anchor on a newly signed long-term lease comprises approximately 75% of the collateral. The anchor has no sales history at the Property and is not required to report sales going forward. GSP sourced a lender to provide full term non-recourse Interest-Only financing subject to a low 7.35% debt yield. The 65% leverage loan has a 3.77% fixed coupon over the ten-year term.

    Rate: 3.77%, Fixed
    Term: 10 years
    Amortization: Full Term Interest-Only
    Loan to Value: 65%
    Prepayment: Defeasance
    Lender Fee: None