Permanent Refinance for a Single Tenant Industrial Building in Los Angeles, CA

Rate: 5.15% fixed
Term: 10 Years
Amortization: 25 years
Loan to Value: 54%
DSCR: 1.25X
Prepayment: Modified Yield Maintenance
Guarantee: Recourse
Lender Fee: 0.25%

Transaction Description:
George Smith Partners successfully placed the $1,500,000 refinance of a 22,250 SF single-tenant industrial building in Los Angeles, California. The Property is well located near USC, minutes from the LA garment district and Downtown LA.

Challenges:
The single tenant is a non-credit private label garment manufacturer and the lease is short term expiring in approximately one year. The Property was built in the 1950s, and the contract rent is below market due to functional deficiencies such as clear height and parking spaces as compared to neighboring inventory. Based on the current rent, the Property doesn’t cash flow in the Lender’s credit review.

Solution:
GSP utilized its extensive market expertise and strong lender relationships to identify a capital provider willing to provide a 10-year fixed loan without TI Holdbacks or a Leasing Commission reserve. The Lender allowed an early rate lock at application, insulating the Borrower from rising interest rates. Priced at 5.15% for the 10-year term, the fixed loan was sized to 54% of value, with a 25-year amortization.

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