Rate: 3.00% fixed
Term: 5 years
Amortization: 5 years
Loan to Value: 44%
Global DSCR: 1.25X
Prepayment: 3%, 2%, 1%
Guaranty: Recourse
Lender Fee: Par
Transaction Description:
George Smith Partners successfully arranged $3,000,000 in a cash-out permanent refinance secured by the sandwich leasehold interest in a single-tenant leased office building in Irvine, California. The Subject Property is in the heart of Orange County’s business district and next to the Irvine Business Complex and John Wayne Airport. The neighborhood is in a mature stage with limited amount of vacant land available for new development. The Property consists of three multi-story buildings having 69,474 SF net rentable space.
The Subject Property is encumbered by a ground lease. The leasehold interest, ground lease, and tenant improvement lease all expire in five years, with no extension options. The non-investment grade tenant has a six year lease remaining and they are not required to provide business financials.
GSP identified a capital provider able to structure a five year fully amortizing loan. The Sponsor’s considerable real estate track record and financial strength further encouraged the Lender to provide a low interest rate. The recourse loan is fixed at 3.00% with a 5-year term and will be fully amortized in five years.
Related Financings
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$5,350,000 Cash-Out Refinance for Owner-User Office Property; Downtown Riverside, CA
July 7, 2021
Transaction Description:
George Smith Partners arranged $5,350,000 in cash-out permanent financing for an owner-user office building located in Downtown Riverside, CA. The Sponsor approached GSP to help assist with the refinance of the Property to help relocate their company headquarters from the east coast. The Sponsor was on a strict deadline with their existing lender, only having 60 days to refinance before the current loan maturity. At the time of the refinance process, the Sponsor was close to completing exterior and interior renovations, including common area upgrades. GSP had to quickly identity a lender who could deliver certainty of execution on short notice, while delivering competitive terms. GSP was able to provide the Sponsor with a 25-year term, and the first 5 years being fixed at a low rate of 4%. The first 12 months are interest only, before converting to 25-year amortization thereafter. There is additional flexibility within the loan structure because there is no prepayment penalty. The cash-out loan allows the Sponsor to use more equity towards continuing to grow their business. Thanks to our long-standing relationship with the Lender, GSP was able to meet the Sponsors deadline and close this transaction within 60 days.
Rate: 4% fixed for 5 Years
Term: 25 Years, First 12 Months Interest Only
Min DSCR: 1.25x
Prepayment: No prepayment penalty
