$3,120,000 for Purchase of 30,000 SF Office Property in the San Fernando Valley; Non-Recourse Financing at 60% LTV

Transaction Description:

George Smith Partners successfully closed a refinance of a mixed-use office and retail property in Santa Barbara with a life insurance company. Despite the current market hesitation towards office properties, GSP was able to secure 10-year, fixed-rate financing given the lower leverage. GSP identified a Lender that was comfortable with the office component due to the 30+ small office users and no significant rollover risk. The largest tenants are a restaurant and movie theater which have been in occupancy for over 20 years.

Transaction Description:

George Smith Partners successfully secured $4,500,000 to refinance a mixed-use office and industrial property in Los Angeles, CA. Our Sponsor had contacted one of his relationship banks to refinance his headquarters building. With the current crisis in lending, they were not able to provide a satisfactory refinance. The Sponsor then engaged GSP to secure financing. In reviewing the Sponsor’s financials, GSP identified significant growth and was able to secure a much larger cash-out refinance of the sponsor’s facility.

Using our relationships and experience, GSP identified an international bank that was able to provide a more aggressive rate and larger proceeds than the other lenders in the market. In 35 days, GSP was able to close this cash-out refinance at a fixed rate of 5.61% for 5 years, with 12 months of interest-only payments.

Transaction Description:

George Smith Partners arranged $9,000,000 in bridge financing to refinance a single-tenant office property in the Inland Empire. The Property has been nearly 100% leased to a county entity for 20 years, with lease renewals every 5-7 years. The Sponsor is leaving the unused space vacant in order to attract a single-tenant government lease buyer. GSP had arranged CMBS financing on the property in 2012 that came due in late 2022. Due to the timing in getting a new lease executed, the Sponsor asked for and received a short extension from the lender/servicer. GSP sourced a bridge lender that was poised to fund upon execution of the lease and estoppel. The loan paid off the existing loan and provided funds for tenant improvements mandated in the lease extension. It also gives the Sponsor maximum flexibility to sell or refinance over the next 2 years.

Transaction Description:

George Smith Partners arranged $15,000,000 in SBA owner-user acquisition financing for a multi-tenant office property located in Beverly Hills, CA. The Sponsor approached GSP for assistance in acquiring the building they had been occupying as a tenant for many years past. Instead of losing cash to rent, they decided to invest in ownership. The Sponsor had tried securing both conventional owner-user and SBA financing on their own before reaching out to GSP but was unsuccessful. This was primarily due to the state of the market with lenders having a pessimistic outlook on office, and the SBA eligibility requirements becoming increasingly more difficult to meet since the COVID pandemic.

Upon getting the assignment, GSP quickly put together a concise and marketable package that would present well to both conventional lenders and the SBA. GSP used their expertise to source attractive terms for the Sponsor and structured a total loan facility equal to 88% of the purchase price, at a sub-5% blended rate.

Additionally, GSP managed to lock the senior portion of the loan despite the volatile interest rate market and quickly worked toward SBA approval to lock the rate on the SBA portion before the next month’s rate hike.

Securing high leverage and keeping the Sponsor’s equity investment low was crucial to ensure the Sponsor could keep the majority of their liquidity in hand for their operations and potential property renovations. Thanks to GSP, the Sponsor successfully purchased the building with financing terms that exceeded their expectations.

Transaction Description:

George Smith Partners successfully placed two simultaneous loans to acquire a five-building office campus in Laguna Hills, California. The 84% occupied Property sits on a 16-acre site adjacent to a reservoir and contains ample parking (4:1000 square feet). The Properties were built in the late 1980s and completely renovated in 2016-2018. GSP structured the financings to fit the Sponsor’s business plan which involved separating the collateral into a two-building bridge loan and a three-building CMBS loan. These loans allow the Sponsor to place long-term, fixed-rate debt on the stable assets while keeping shorter-term debt on the more transitional buildings.

Loan 1 (3 Buildings): $24,800,000 of non-recourse, seven-year fixed rate first mortgage CMBS debt for the acquisition of three of the office buildings (total 158,000 square feet) which are 84% leased. GSP sourced a lender able to provide seven-year, non-recourse financing and the ability to close with a complicated DST (Delaware Statutory Trust) equity structure in a tight timeframe. The loan was sized to a 9.00% debt yield, 59% LTV, or 1.60x debt service coverage ratio on the 5.93% fixed rate coupon. The Sponsor bought down the interest rate.

Loan 2 (2 buildings) $14,600,000 of non-recourse, 75% LTV, bridge financing for the acquisition of the remaining two office buildings (total 66,000 square feet), which are 79% leased with upcoming tenant rollover. GSP identified a Lender that could provide 75% leverage and a flexible 24-month loan term with three 12-month extensions. The loan is priced at 5.95% + 1 Month Term SOFR and is non-recourse. GSP was able to identify a lending source that not only understood the market and demand for office space in the market.