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$30,000,000 10-Year Interest-Only, Permanent Financing for 230,000 SF Grocery Anchored Shopping Center; Southern California

Rate: 10-Year Swap Rate + 185 bps; 3.31% Fixed
Term: 10 Years
Amortization: 30 Year, 10-Year Interest-Only
LTV: 65%
Prepayment: Defeasance
Guaranty: Non-recourse except for “bad acts” and environmental

Transaction Description:

George Smith Partners successfully placed $30,000,000 in permanent fixed-rate financing for a 230,000 SF infill Southern California retail center amidst the COVID-19 pandemic. As a market-leading retail center near local economic and transit hubs, the Property’s mix of need-based and experiential tenants proved resilient. Capital providers continue to be hesitant in financing retail but were specifically concerned with California’s mandates that impacted the operation of non-essential businesses. As non-essential businesses and experiential tenants comprise a significant portion of tenancy, this posed significant challenges. These included the temporary closure of a movie theatre with less than one year of primary lease term remaining and a fitness center that vacated during the pandemic.

George Smith Partners secured 10 years of permanent financing with full-term interest-only in a financial environment that continues to be cautious towards retail. GSP negotiated competitive pricing at the desired level of proceeds and guided the deal to a successful closing.

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