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$15,100,000 Refinance of a Mixed-Use Office and Fitness Anchored Retail Property; Los Angeles, CA

Rate: SOFR + 2.25%
Term: 3 Years + Two, 1 Year Options
Amortization: 30 Years
Fee: 50 Basis Points
Prepayment: 2, 1, 0%
Hedge Protection: Cap Purchase
Guaranty: Non-Recourse

Transaction Description:

George Smith Partners successfully placed the non-recourse rate and term refinance of a 112,000 square-foot, mixed-use office and fitness anchored retail center facing loan maturity. Although several tenants were mandated to close by State Regulators during COVID, Center occupancy was not significantly impacted. The sit-down restaurant remained open and adapted operations for take-out only. The restaurant has since expanded, leasing an additional suite, and now permanently offers take-out beyond their traditional dining room facilities.

The maturing loan, SWAPed at inception, has 90 days remaining on their existing SWAP contract. GSP successfully negotiated that contract through the first three months of the new loan, saving the Sponsor over $30,000 in SWAP breakage costs. Priced at SOFR plus 225, the replacement debt is a three-year term with two, 1-year options to extend, and amortized over 30 years. A SOFR cap will be purchased effective upon the existing SWAP expiration, offering a hedge to higher future interest rates. The cap will only be for the initial first two years of the loan and then extended annually to maintain a lower cap cost.

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