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$1,450,000 Medical Office DPO Refinance

8 – 28 – 13
Transaction Description:  GSP placed the refinance debt for a negotiated discounted payoff of a CMBS loan collateralized by a 42,000 square foot Medical Office Building. Prior to the discount, the loan balance was approximately $6,200,000. The bridge loan is fixed at 12% for 18 months, allowing time for the Borrower to increase occupancy from the 30% at close.
Challenge: The subject property went into default in the market down-turn when market rents declined and vacancy spiked. A major tenant vacated when given the option to buy their own property at a lower cost than renting. The Special Servicer agreed to a substantially discounted loan payoff in exchange for a very brief window to close.
Solution: Certainty of close was most critical. GSP worked closely with the lender to push processing and worked with the 3rd party vendors to secure draft reports allowing for closing to execute as scheduled.
Rate: 12%
Term: 18 Months + 1 – Six Month Ext.
Amort: IO
LTC: 65%
Prepayment: None
Recourse
Lender Fee: 3.5%
Advisor: Nathan Auslander

Related Financings

  • $6,279,000 Construction Completion Debt for Georgia Medical Office Building

    July 24, 2014

    7 – 23 – 2014
    Transaction Description: GSP placed $6,279,000 of non-recourse financing to complete the construction of a 35,000 square foot medical office building space in Decatur, Georgia.  The client was not a seasoned real estate developer but savvy enough to identify an immediate opportunity in a burgeoning market. The building was only partially completed and required additional construction financing to bring the asset to Certificate of Occupancy. Multiple lenders were not comfortable due to the sponsor being a relatively unseasoned developer and stepping into a partially completed construction project with a new general contractor. The Borrower was unable to provide a repayment guarantee due to a recent bankruptcy, open tax liens and pending litigation. Sensitive to initial lender deposits, the Borrower had previously been under application to a private lender who lacked discretionary capital and utilized the deposit as a profit center, without providing services. GSP procured market rate comps and supporting documentation to confirm market strength and provided an unsolicited LOI for a sale of the subject prior to obtaining the CofO. Sponsor capacity was substantiated by his ability to bring the asset to its’ current level of completion, retain a new GC and pre-lease 100% of the 35,000 square feet to multiple tenants. GSP called on their relationship sources to identify discretionary capital motived by funding loans over collecting one-off fees. The one-year, non-recourse floating rate term is priced at 10.5% and does not require a prepayment penalty.
    Rate: 10.5%
    Term: One Year
    Amort: Interest Only
    Prepayment: None
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    Advisors:  Gilda Rivera, Salar Royaei
  • 100% of Cost Financing For Asset Coming Out Of Bankruptcy

    March 13, 2014

    3 – 12 – 14
    Transaction Description: GSP successfully placed the 100% note acquisition financing for a single tenant owner/user distressed asset that was in bankruptcy. The prior senior note was retired and replaced with a new capital structure at close. The Borrower was placed in default by original lender and the deed of trust was sold through an auction company to a third party who forced the Borrower to file BK or lose his equity in the 1985 vintage West Covina office building. The two year term loan is priced at 9.99% and is Interest Only. Lender legal fees were capped at $6,500.
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    Rate: 9.99%
    Term: 2 Years
    Amort: IO
    LTC: 100%
    Prepayment: 4 Months Interest
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  • $7,300,000 Discounted Payoff of a Mixed-Use Office and Retail Building in Claremont, California

    February 21, 2012

    2 – 21 – 12
    Transaction Description:  George Smith Partners successfully placed the refinance of a discounted payoff (DPO) on a mixed-use, office & retail asset in Claremont, California. The subject property is listed on the Historical Landmark Registry. The new loan financed 97.3% of the total DPO amount on a non-recourse basis for a 3 year term.
    Challenge: The Sponsor did not have formal approval of the DPO terms from the existing lender until after appraisal receipt, and needed to close within weeks thereafter. While going through the DPO process, one tenant vacated the building.
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    Term: 3 Years
    Amort: 30 Years
    LTV: 73% of as-is Value
    LTC: 97.3%
    DCR: 1.25
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    Brokers: Steven Orchard, Michelle Lee, Gary E. Mozer