$1,800,000 Cash-Out Refinance of a Strip Retail Center

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Transaction Description: George Smith Partners successfully placed the $1,800,000 refinance of a 32,260 square foot unanchored retail asset in Northridge, California. The new loan included a return of capital component for the Borrower. This non-recourse loan self-liquidates and is fixed for the entire 10 year term at 4.25%, but provides for a step-down prepayment penalty.
Challenge: The Sponsor had 10 years remaining on a high interest rate/fully amortizing loan. They requested a return of equity, but without extending the payment term or negatively impacting their cash flow after debt service. The Borrower requested non-recourse capital but required flexible prepayment options for the fixed rate term. This is the only commercial asset for this Borrower, adding to the complexity of the loan request as many portfolio lenders look to more experienced owners and operators.
Solution: GSP was able to design a unique loan structure that was tailored to the Sponsors desire to dramatically lower their interest rate while maintaining the same loan term. Mr. Shaffer was able to identify a San Fernando Valley capital provider who knew the location and was comfortable to offer a cash-out to a less-than experienced Borrower on a non-recourse basis.
Rate: 4.25%
Term: 10 Years
Amort: 10 Years
LTV: 50%
Prepayment: Step-down
Non-recourse
Broker: Bryan Shaffer

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