Rate: 3.65% Fixed
Term: 10 Years
Amortization: 30 Years
LTV: 45% (As-Is Completed)
Guaranty: Non-Recourse: 3.65% Fixed
George Smith Partners successfully secured $34,000,000 in non-recourse, construction take-out, permanent financing at 3.65% fixed for 10 years for a newly built three-story, mixed-use, 30-unit, high-end building in Santa Monica, CA.
The Sponsor’s existing construction loan was set to mature, and the Property had not yet received a temporary certificate of occupancy. In addition, the borrowing entity was headquartered in a foreign country with extensive development experience abroad, but this was their first project in the U.S. Furthermore, only one of the three retail spaces had been leased and pre-leasing activity on the apartment units had not yet commenced.
GSP focused on the superior location, high-quality residential units and strength of the sole retail tenant, Trader Joe’s, to ensure maximum interest among financing sources. Ultimately, GSP leveraged its expertise and strong relationship with a Life Insurance Company to execute a structured, non-recourse, low-rate, permanent loan – prior to Certificate of Occupancy issuance. This early financing also saved the Sponsor from having to secure a bridge loan. Furthermore, GSP also negotiated a top-off to the loan based on the Property achieving certain milestones, thus enabling the Sponsor to access additional capital in the future.
September 3, 2019
George Smith Partners secured $11,450,000 of life-company debt to refinance an existing senior loan for a regional private airport facility in Southern California. The Property is a 133,490 square foot, 10 building, 56 hangar private airport facility on a ground lease to the City of Torrance. The remaining term of the ground lease is only 23 years, which created limitations for the amortization of the senior loan. GSP worked with a lender that allowed for an amortization that equaled 80% of the remaining years of the ground lease. Loan proceeds repaid the existing senior loan, covered closing costs, and provided a return of equity to the Sponsor. The financing is an 18 year term loan that maximizes cash flow for the Sponsor. The recourse fixed-rate loan is priced at 4.75%.