Transaction Description:
George Smith Partners arranged $15,000,000 in SBA owner-user acquisition financing for a multi-tenant office property located in Beverly Hills, CA. The Sponsor approached GSP for assistance in acquiring the building they had been occupying as a tenant for many years past. Instead of losing cash to rent, they decided to invest in ownership. The Sponsor had tried securing both conventional owner-user and SBA financing on their own before reaching out to GSP but was unsuccessful. This was primarily due to the state of the market with lenders having a pessimistic outlook on office, and the SBA eligibility requirements becoming increasingly more difficult to meet since the COVID pandemic.
Upon getting the assignment, GSP quickly put together a concise and marketable package that would present well to both conventional lenders and the SBA. GSP used their expertise to source attractive terms for the Sponsor and structured a total loan facility equal to 88% of the purchase price, at a sub-5% blended rate.
Additionally, GSP managed to lock the senior portion of the loan despite the volatile interest rate market and quickly worked toward SBA approval to lock the rate on the SBA portion before the next month’s rate hike.
Securing high leverage and keeping the Sponsor’s equity investment low was crucial to ensure the Sponsor could keep the majority of their liquidity in hand for their operations and potential property renovations. Thanks to GSP, the Sponsor successfully purchased the building with financing terms that exceeded their expectations.
- Senior Loan: $10,000,000
- SBA: $5,000,000
- Rate:
- Senior Loan: 4.92%
- SBA: 4.87%
- Term: 25 Years
- LTPP: 88%
- Prepayment: 5-5-4-4-3-3-2-2-1-1
