$26,750,000 Non-Recourse Acquisition Bridge Financing for an Off-Market, 74% Occupied, Four Property Multi-Tenant Industrial Portfolio

Rate: L+4.25%
Term: 3 years plus two 1-year extensions
Amortization: Interest Only
LTC: 67.5%
Prepayment: Open Prepayment with 18 month interest make whole
Release Provisions: Structured release provisions
Non-Recourse
Lender Fee: 1.00%

Transaction Description: George Smith Partners successfully structured and placed the non-recourse acquisition bridge loan for an off-market and significantly undermanaged four property multi-tenant industrial portfolio, totaling 445,000 square feet in the Western United States. At acquisition the portfolio was 74% occupied with a going in debt yield of sub 7.5%. $22,050,000 of the on-book financing was funded at closing. The remaining $4,700,000 is to be future funded for immediate property improvements, future upgrades including funds for the Sponsor’s strategic spec-suite program, as well as future good news leasing expenses. There are release provisions to allow individual buildings to be sold or refinanced. The interest rate floats at L+4.25% for a three year term on an interest only basis, with two (2) one year extensions. Our Sponsor purchased a two year cap at closing with a required renewal in the third year.

Advisors

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    $43,500,000 Bridge Financing for Nearly-Vacant Industrial Building in Secondary Market

    April 17, 2019

    Transaction Description:

    George Smith Partners secured $43,500,000 in bridge financing collateralized by a 95% vacant, 2.2MM square foot industrial building in a secondary Midwestern market. The building was constructed through the 1950s and 1960s by a major retailer and used for many years as a major distribution center. As internet retail ate into the tenant’s business, the building slowly lost its business importance to the prior owner. The Borrower, a well known owner and operator in the area bought the Property off market unoccupied approximately one year ago and has been improving the property and been in leasing talks with an array of strong tenants. The lease that occupies 5% of the building is attributed to a third party logistics subsidiary of the Borrower.

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    Rate: One-Month LIBOR + 5.50%
    Term: Two years plus two one-year extension options
    Loan to Value: 80% (121% of Purchase Price / New Basis is 140% of Purchase Price)
    Amortization: Interest only during the loan term
    Guarantee: Non-recourse
    Lender Fee: 1.00%
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  • Expand

    $33,000,000 Non-Recourse Acquisition Bridge Financing for an 82% Occupied Multi-Tenant Industrial Business Park

    August 17, 2016

    George Smith Partners successfully structured and placed the non-recourse acquisition bridge loan for a 27 building multi-tenant industrial business park, totaling 475,000 square feet with over 231 tenants in the Pacific Northwest. At acquisition the property was 82% occupied with a going in debt yield of approximately 9.5%. $24,530,000 of the on-book financing was funded at closing with $7,220,000 to be future funded for immediate property improvements, future upgrades which includes funding for the Sponsors’ strategic spec-suite program, as well as future leasing costs. Upon achieving a predetermined net operating income, the lender will advance an additional $1,250,000 earn-out. Interest will not be paid on future funding until disbursement. Floating at L+2.75% for a three year term; the first two years are interest only. There is one (1) two-year extension.

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    LTC: 65%
    Prepayment Penalty: None
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  • Expand

    $16,000,000 Non-Recourse Acquisition Bridge Financing for an 85% Occupied, Three Property Multi-Tenant Industrial Portfolio

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  • Expand

    $23,500,000 Acquisition Bridge Financing of two Multi-Tenant Industrial Business Parks to 75% of Total Capitalization 

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  • Expand

    Multi-State Bridge Loans: $172,300,000 National Portfolio Non-Recourse Bridge Financing; 36 Properties in 17 States

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    Transaction Description:  JJay Brooks successfully arranged $172,300,000 of bridge financing for a portfolio of 36 properties spanning 17 states (from Louisiana to Alaska) that had been mired in complex litigation for several years. Assets included regional malls, office buildings, industrial properties and mobile home parks located in secondary and tertiary markets. Although the initial debt was being serviced, the litigation resulted by a loan maturity default during the recession when the capital markets where devastated and the existing lender would not negotiate an extension. Settlement of the litigation required certainty of close with a “drop-dead date” that would have resulted in significant borrower losses had the financing not closed. The final debt structure involved two unrelated lenders with multiple layers of senior and mezzanine debt, structured over five loans. Prepayment and yield maintenance flexibility was a critical component of the structure that allows the borrower to extract properties from the financing in the coming years. Generally speaking, the loans were priced with either a floating (with an interest rate cap) or fixed interest rate with six months to 24-months of yield maintenance. Leverage varied depending on the stability of the asset and the term was structured to provide adequate time to liquidate several assets and identify permanent debt for others.
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    Rate: Various
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    Advisor: JJay Brooks

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