Term: 12 months + 6 month extensions
Guaranty: Full Recourse
Prepayment: 6 months minimum interest on DTLA and San Fernando. Open prepay on South LA
Lender Fee: 3 points
George Smith Partners secured a $17,600,000 bridge loan for the acquisition and renovation of three separate commercial and retail buildings in the Los Angeles area. The first building is located in DTLA. Proceeds from the financing will be used for the purchase and adaptive reuse of this 43,000 SF mixed-use building. The second and third buildings are located in the San Fernando Valley and South LA, respectively. Proceeds from the financing will be used for major remodels on both buildings. The building in the San Fernando Valley will undergo a full repositioning of a flower shop into a new state-of-the-art, standalone coin-laundromat. The South LA mixed use asset is 75% complete. It is comprised of a two-story commercial building containing a 9,000 sf laundromat on the ground level with two residential units on the second floor. The entire Property was taken down to the studs, and a portion of this financing will cover the remaining cost of completion.
Despite the strength and experience of the Sponsor, we faced four major issues in obtaining financing for our Sponsor. The first challenge was unresolved past title issues. The second challenge we were up against were maturing interim loans. Next, due to the high volume of projects in the City of LA, power connection to one of our sites was delayed. Lastly, the initial financing request was for 85% LTC. After GSP’s full analysis, we discovered that the financing needed to payoff existing liens and provide the working capital needed for a successful execution was closer to 100% LTC.
GSP worked with a private balance sheet lender that provided a tailored bridge loan for the full capital stack. The initial term is for 12 months plus extensions. Because of GSP’s past experiences with this lender, we were confident in their ability to navigate such a complicated structure and their certainty of execution.
$42,400,000 (80% LTC) Bridge Financing for a 26-Property Portfolio of Walmart Shadow-Anchored Shopping Centers; Located Throughout the Midwest and South
August 25, 2021
George Smith Partners successfully placed $42,400,000 in non-recourse bridge debt financing, which funded 80% of total project costs for the acquisition and value-add business plan of an off-market, 26-property retail portfolio spread across 19 midwestern and southern states. Although financing retail value-add business plans during COVID is challenging, the portfolio is comprised of a diversified rent roll including 20% of gross potential rent derived from investment-grade tenants. Furthermore, each asset within the portfolio is shadow anchored by strong performing corporate owned Walmart grocery shopping centers.
GSP leveraged its lender relationships and capital markets expertise to source a lender who understood the business plan and product type, who was willing to invest the time and effort to underwrite a large retail portfolio spread throughout 19 different states, and in markets with average populations below 30,000; during COVID.
Rate: L + 5.05% (5.10% floor)
Amortization: 24-months I/O, 25-year amortization thereafter
LTV: 76% As-stable loan-to-value
Lender Fee: 1% in / 1% out (waived if CMBS exit through Lender)
Prepayment: 18-months minimum interest with pre-negotiated release provisions for each property and with open prepayment on certain assets identified prior to close
August 4, 2021
George Smith Partners successfully secured $25,500,000 in non-recourse bridge financing for a destination dining and retail center nestled in the heart of Los Angeles’ Koreatown. The 42,000 square foot property is one of Koreatown’s most trafficked retail centers and maintained stable collections throughout 2020. The recapitalization retired the existing debt and provided future funding for capital expenditures, tenant improvements and leasing expenses with no new equity required from the Sponsor.
The Los Angeles-based sponsorship team acquired the Property in 2016, identifying the asset as a generational heirloom and a unique opportunity to create substantial value. Despite market volatility and COVID-19 related challenges in the retail sector, GSP was able to identify a lender with local knowledge and expertise that understood the importance of this asset within the context of the neighborhood, and the long-term viability of the business model.
June 23, 2021
George Smith Partners successfully arranged bridge acquisition financing for a 6-unit retail property in Los Angeles, California. The Subject Property took a major hit with rent collections during the Covid-19 pandemic and was operating below market conditions. GSP identified a capital provider who was able to offer an aggressive rate and terms, required no holdbacks of any sort, required no deposits to be held at their branch and provided an open prepayment penalty structure that allowed the Sponsor flexibility once the Subject Property is stabilized and seasoned.
Term: 7 years
Amortization: 25 years
Prepayment Penalty: None
Minimum Interest Payments: None
Guaranty: Full recourse
Banking Relationship/Deposits Required: None
- Advisors: Reuven Risch
$45,600,000 Non-Recourse Bridge Financing for Recapitalization of Lido Marina Village in Newport Beach, CA
April 21, 2021
George Smith Partners structured and arranged $45,600,000 in bridge financing for the recapitalization of the Lido Marina Village, a 116,000 sf multi-block, waterfront boutique retail and office property on Balboa Peninsula in Newport Beach. Lido Marina Village features retail, restaurant, and office space in 14 separate structures including prime waterfront retail and restaurant spaces featuring spectacular harbor views, along with 47 boat slips, creating an iconic Newport Beach destination. Some highlighted restaurants include Orange County’s only Nobu and Malibu Farm locations. Retail tenants include first-to-market “laid back luxe” retailers such as Elysse Walker, LoveShackFancy, Serena & Lily, the RealReal, and Jenni Kayne. The Property stretches from the waterfront, across a public street and walkway to the Via Lido street-front retail. It also includes a 372-space parking structure and 91 on-grade parking spaces. The Project is located on 17 legal parcels totaling 3.5 acres, with 4 parcels held as leasehold interests. Since the acquisition in 2013, the Sponsor successfully rebranded Lido Marketplace as a super high-quality boutique and restaurant destination, featuring a “who’s who” of tenants. Even during the pandemic, Lido Marina Village occupancy stayed high, and the Sponsor signed new leases at “high street” rents. The Property has been thriving in part due to their shoppers feeling comfortable in the open air, pedestrian friendly and waterfront environment.
$11,200,000 Non-Recourse, Cash-Out Bridge Refinance for Two-Story Retail in Koreatown; Los Angeles, CA
January 27, 2021
George Smith Partners secured a $11,200,000 non-recourse bridge refinance with cash-out for a two-story retail plaza in the heart of Koreatown in Los Angeles, CA. Located next to a Metro D (Purple) Line subway station along a very busy stretch of Wilshire Boulevard, the Property is anchored by 7-Eleven and Carl’s Jr. and features a fast-casual food hall on the second floor. However, the food hall has been closed due to COVID.
The Sponsor, a prolific developer and property owner, recently announced plans to replace the plaza with a 17-story, mixed-use apartment tower that includes affordable units and some commercial space. GSP was engaged to source a bridge solution to pay off the existing maturing loan and provide prepayment flexibility once the Project’s entitlements and permits are secured.
GSP focused on the strength of the Sponsor, the bustling and densely populated Koreatown market, home to several large and small-scale projects currently planned or under construction and the Purple Line Extension project which will provide a dependable, high-speed alternative for travel between downtown Los Angeles, Miracle Mile, Beverly Hills and Westwood. The financing closed within 11 days of the term sheet being signed.
June 17, 2020
George Smith Partners arranged $13,500,000 in quick-close, cash out, bridge-to-bridge financing for a multi-tenant retail center in Echo Park, California. The Sponsor approached GSP with intentions of taking out their existing lender due to an issue with lease approval for a cannabis tenant. In order to purchase an out-parcel on the Property, the cannabis user needed a lease in place so it could obtain a license from the local jurisdiction. If approvals were not granted, the Sponsor would have the ability to break the lease. GSP identified a non-bank lender who was comfortable approving a lease on a space which may never be occupied. The Lender’s flexible prepayment structure allowed the Sponsor to execute their business plan as the cannabis tenant planned to acquire an out-parcel on the Property after receiving approvals from the City. The first trust deed was sized to 60% of value with no hold back requirement for interest reserve or capital expenditures. The non-recourse, interest only loan does not carry any prepayment penalties. The Sponsor plans to take out the loan within 12 months with long-term fixed rate debt.