$1,710,000 Refinance for an Owner Occupied Industrial Building; Santa Clarita, CA

Rate: 5-year Treasury + 2.05% (all-in rate 3.5%), no floor
Term: 5 year fixed
Amortization: 25 years
Loan to Value: 46%
Debt Coverage Ratio: 1.25x
Prepayment: 3%, 2%, 1%
Guaranty: Recourse
Lender Fee: 0.25%

Transaction Description:

George Smith Partners successfully secured $1,710,000 of rate and term refinancing for an owner-user industrial property in Santa Clarita, CA. The Property is a free-standing manufacturing building with 25% office.. It was built in 1987 with a net rentable area of 23,350 SF. Santa Clarita offers tremendous access to labor and it is conveniently located close to regional distribution centers, studio and entertainment uses, manufacturing and research and development businesses. The loan is sized to 46% LTV , and is fixed for 5 years at 3.50% with 25-year amortization.

The Sponsors are in the aerospace machining and assembly and stock car industries, which are highly specialized. The Sponsor plans to sell the Property in 5 years. Although investors have a strong appetite in industrial properties, this Property faces a comparative disadvantage as it only has grade level loading capacity as opposed to dock high loading. Additionally, the Property is built upon single tenant capacity, and it offers a functional obsolescence of 25% office ratio.

GSP sourced a lender who has a group specializing in the Aerospace and Defense industry. This lender underwrote and understood the opportunities and challenges in the business. The Lender provided a 5-year term, with the last two years open with no prepayment penalty.


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