Rate: 4.92%
Term: 10 Years
Amortization: 2 Years Interest Only; 30 Years Thereafter
LTV: 75%
Prepayment: Defeasance
Non-Recourse
Lender Fee: Par
Transaction Description: George Smith Partners successfully placed a high leveraged, non-recourse $22,800,000 refinance for a mixed-use 225,000 square foot warehouse building with a significant office component. The Orange County, California property sits on a 12 acre parcel and was constructed in 1966 and subsequently renovated in 1985 and again in 2001. The 2001 renovation was structured to accommodate a government agency whose footprint occupies 60% of the gross improved square footage. Their build-out consists of 31% office (2-story), 19% air conditioned warehouse, and 50% conventional warehouse. Loan proceeds were allocated to cover additional tenant improvements and lease commissions as this agency recently extended for an additional 15 year term. The remaining square footage is leased to an industrial bakery who has occupied the property since 1989. Their lease rolls during this 10 year loan term. GSP sourced a capital provider who underwrote the tight market constraints and agreed to push proceeds below an 8.0% debt yield without layering on mezzanine debt. Fixed at 4.92% for 10 years, the non-recourse loan is interest-only for 2 years before rolling into a 30 year amortization schedule.
Advisors
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Steve Bram
Managing Director & Principal / GSP Co-Founder
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David R. Pascale, Jr.
Senior Vice President
Related Financings
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$15,500,000 Refinance and Renovation Financing
July 17, 2015
Transaction Description: George Smith Partners arranged the refinance and Net-Zero Energy (NZE) renovation financing of a 141,770 square foot industrial/office building in Commerce, California. Totaling 75% of as-completed value, the structured financing consisted of a $4,750,000 first trust deed, a $10,250,000 second trust deed and an unsecured loan of $500,000. The three loans carry a fixed blended rate of 4.62% and self-liquidates over 12 years.
Challenge: The Sponsor initially reached out to GSP with only three weeks before a maturity default on their existing debt. They also requested funds to convert the entire facility to Net Zero Energy, but had not finalized plans or a budget. GSP identified a lender willing to refinance the first trust deed on a short timeline and also commit to funding the projected NZE budget. The lender’s only condition for the rapid closing was that the roof and parking lot be replaced within one year. When the scope of the NZE project and budget ballooned far beyond initial projections, the Sponsor elected to delay the roof and parking lot replacement while researching an alternative financing through New Market Tax Credit and PACE bonds for the expanded project’s scope. After a lengthy delay and once again approaching technical default on the new first trust deed, the Sponsor reached out to GSP to restructure the capital stack.
Solution: GSP successfully negotiated an extension on the technical default and structured new secured capital stack plus an unsecured note to provide the funds necessary to complete the NZE renovation.
Rate: 4.62%
Term: 12 Years
Amort: 12 Years
LTV: 75%- Advisors: Gary M. Tenzer
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$45,600,000 Permanent Financing on Secondary Market Industrial Property
January 15, 2015
Transaction Description: J. Jay Brooks successfully arranged the $45,600,000 refinance of a 2.1 million square foot industrial/office property in Northern California. The asset is a beautifully redeveloped military base and the financing was coordinated to allow the borrower to acquire the fee interest in the land. Cash flow was recovering from a downward trend caused by the recession, however diversified sustainable income from a variety of business types – from very small to very large – gave the Sponsor the flexibility to provide space as the local market demanded. Fixed for 10 years at 4.33%, the non–recourse loan is interest only throughout the term. There are no reserves beyond tax and insurance impounds.
Rate: 4.33%
Term: 10 Years
Amort: Interest Only
Non-recourse -
$2,800,000 Bridge Loan on a 71% Occupied Southern California Mixed-Use Asset
October 24, 2013
10 – 23 – 13 Transaction Description: Shahin Yazdi placed the 70% of purchase debt for a distressed Office and Industrial property in Southern California. The five year term is priced at Prime plus 50 basis-points with a 4.25% floor, interest only for the first 18 months. The loan will then amortize over 25 years negating the need for take-out financing upon stabilization. Challenge: The property was 71% occupied at close and maintained a 61% historical economic occupancy. The Borrower has limited commercial real estate experience. This acquisition had a short escrow period with numerous hurdles to overcome. Solution: Upside potential and pro-forma garnered significant interest from the capital markets. As a prior REO, the asset was distressed over mis-mismanagement. A well-established 3rd party property management company was retained to handle daily operations and leasing. All third party reports were rushed and provided the lender with all due diligence materials presented within 72 hours of their request. Rate: Prime + 0.5% w/4.25% Floor Term: 5 Years Amort: IO for 18 Months then 25 Years LTC: 70% DCR: 1.15 Prepayment: None Recourse Advisor: Shahin Yazdi
