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$16,380,000 of Permanent Financing for Revitalized Downtown Office Building; Los Angeles, CA

Rate: 3.75% (Priced 0.50% over Prime)
Term: 5 Years
Amortization: 30 Year Amortization
Loan to Value: 65%
Guarantee: Recourse
Lender Fee: 0.50%
Prepayment: Stepdown

Transaction Description:

George Smith Partners arranged $16,380,000 in permanent financing for a newly stabilized, 7-story office building in the historic core of Downtown Los Angeles. The Sponsor purchased the Property in 2017 and completed a massive renovation to completely modernize the structure, façade, and interiors. The Sponsor leased 85% of the building prior to completing the renovation, including the ground-floor retail suite which is leased to a very high-end restaurant group. Some of the tenants are marijuana-related-businesses (“MRB’s”), meaning they service companies associated with marijuana, which made the financing challenging. GSP identified a recourse bank that was comfortable with the tenants and structured a five-year loan with an earn-out for additional leasing. The financing is fixed at an interest rate of 3.75% for the entirety of the loan term and will amortize over a 30-year period.


Related Financings

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    July 7, 2021

    Transaction Description:

    George Smith Partners arranged $5,350,000 in cash-out permanent financing for an owner-user office building located in Downtown Riverside, CA. The Sponsor approached GSP to help assist with the refinance of the Property to help relocate their company headquarters from the east coast. The Sponsor was on a strict deadline with their existing lender, only having 60 days to refinance before the current loan maturity. At the time of the refinance process, the Sponsor was close to completing exterior and interior renovations, including common area upgrades. GSP had to quickly identity a lender who could deliver certainty of execution on short notice, while delivering competitive terms. GSP was able to provide the Sponsor with a 25-year term, and the first 5 years being fixed at a low rate of 4%. The first 12 months are interest only, before converting to 25-year amortization thereafter. There is additional flexibility within the loan structure because there is no prepayment penalty. The cash-out loan allows the Sponsor to use more equity towards continuing to grow their business. Thanks to our long-standing relationship with the Lender, GSP was able to meet the Sponsors deadline and close this transaction within 60 days.

    Rate: 4% fixed for 5 Years
    Term: 25 Years, First 12 Months Interest Only
    Min DSCR: 1.25x
    Prepayment: No prepayment penalty

  • $11,825,000 Cash-Out, Non-Recourse, Permanent Financing with a 3.35% Coupon for a 20-Year Term on an Office Property; Fayetteville, Arkansas

    May 12, 2021

    Transaction Description:

    George Smith Partners successfully placed $11,825,000 ($200/SF) in non-recourse financing that provided substantial cash-out to the Borrower with a 3.35% fixed-rate coupon for a 20-year loan term on a University-affiliated research and technology office building during the COVID-19 pandemic. The loan was creatively structured as a credit tenant lease financing due to the University’s backstopping the Property’s cash flow through a master lease. GSP worked with the Borrower, Lender, and University to amend the master lease so that it satisfied the needs of all three parties to facilitate both the refinancing as well as successful donation of the building to the University’s technology foundation, which occurred concurrently with the close of this financing.

    Rate: 3.35% (fixed) for twenty years
    Term: 20 years
    Amortization: 20-year amortization
    LTV: 68%
    DSCR: 1.05x
    Lender Fee: Par
    Prepayment: Yield Maintenance
    Guaranty: Non-Recourse

  • Abbot Kinney Co-Working Creative Office Conversion Bridge-to-Permanent Financing; Venice, CA

    April 15, 2020

    Transaction Description:

    George Smith Partners placed bridge to permanent financing for the creative office conversion of a co-working space on Abbot Kinney in Venice, California. GSP sourced a lender comfortable with the trophy project’s high basis per square foot and co-working business model. The Project is slated to be the only co-working option on Abbot Kinney, one of the most coveted retail thorofares in Los Angeles. The 4.75% fixed interest rate was locked at application and featured 24 months of interest only followed by 25-year amortization for the remaining 5-year term. The loan was recourse to an entity, as no warm body was available and carries no prepayment penalty.

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    Term: 7 Years
    Amortization: Interest only for 24 Months; 25-year amortization thereafter
    Yield Maintenance: None
    Recourse: Entity-level only