Term: 10 Years
Amortization: Full Term Interest Only
Prepayment: Defeasance until last 6 Months which are open with no penalty.
Guaranty: Non-recourse except for “bad acts” and environmental
George Smith Partners successfully placed $31,633,000 in permanent financing for an office building in the Salt Lake City area amidst election uncertainty and COVID-19. In particular, pandemic restrictions and the proliferation of “work from home” concerned many lenders that office may face a very slow recovery. Although the Building’s sole tenant was non-credit, their long lease term and exceptionally strong financials motivated the Lender to provide a competitive quote. Well-located in a fast-growing market, GSP structured loan terms that were highly conducive to the Sponsor’s long-term plan and guided the transaction to an expedient closing.
Gary E. Mozer
Managing Director & Principal
Senior Vice President
July 7, 2021
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.
April 15, 2020
George Smith Partners placed bridge to permanent financing for the creative office conversion of a co-working space on Abbot Kinney in Venice, California. GSP sourced a lender comfortable with the trophy project’s high basis per square foot and co-working business model. The Project is slated to be the only co-working option on Abbot Kinney, one of the most coveted retail thorofares in Los Angeles. The 4.75% fixed interest rate was locked at application and featured 24 months of interest only followed by 25-year amortization for the remaining 5-year term. The loan was recourse to an entity, as no warm body was available and carries no prepayment penalty.
Rate: 4.75% fixed (locked at application)
Term: 7 Years
Amortization: Interest only for 24 Months; 25-year amortization thereafter
Yield Maintenance: None
Recourse: Entity-level only
$3,900,000 Cash-Out Permanent Financing with Full Term Interest-Only After Exchange; Los Angeles, CA
July 2, 2019
George Smith Partners financed the purchase of a mixed-use retail/office building in Los Angeles, California, last year, using a 1031 exchange. GSP used our vast experience with tax differed exchanges to arrange a cash-out financing with a seven-year fixed rate and is full term interest-only. The cash- out was used to purchase a new property and the Sponsor was able to reinvest their entire exchange in the purchase to differ any taxable gain. The new refinance allowed the Sponsor to pull cash out from the property tax free and use that cash to grow his real estate portfolio. While the cap rate at purchase was very low, the Property’s value will continue to increase due to its location in a great Los Angeles neighborhood. In a traditional loan, the Borrower would be limited on the loan size and cash flow but structuring the full term interest-only loan allowed the Sponsor to achieve positive cashflow and acquire the new asset without issue.