$32,000,000 Cash-Out Refinance of a Northern California Ethnic Grocery-Anchored Retail Center

Transaction Description: GSP successfully placed a $32,000,000 cash out refinance on a stable 1980’s vintage retail center in Northern California; anchored by an ethnic grocer emerging from bankruptcy. The Lender agreed to indemnify the Sponsor for Lender’s legal costs until Lender’s credit approval. The 4.55% fixed rate ten year loan has interest only payments for the first five years and amortizes on a 30 year schedule for the remaining five years of the term. Funded at par, the non-recourse loan carries a defeasance prepayment penalty.

Challenge: The grocery anchor was in Chapter 11 bankruptcy at the time of loan application. Sponsor faced a maturity deadline on the existing loan that required payoff within in approximately 30 days.

Solution: GSP leveraged lender relationships and strong sponsorship to identify a capital source willing to underwrite the loan concurrent with the anchor’s bankruptcy proceedings in order to meet the closing timeline. Despite the anchor’s Chapter 11 proceedings, the Sponsor obtained a full leverage loan with a significant interest only payment period resulting in significant cash out at closing, increased cash flow during the loan term, and a low fixed interest rate for ten years.