Term: 10 year fixed
Amortization: 30-year amortization
Loan to Value: 75%
George Smith Partners successfully arranged $3,500,000 acquisition financing of a single tenant triple net asset located near Austin, Texas. The in-place retailer is a well-known regional auto body repair shop who recently signed a lease and occupied the space. It was crucial to identify a lender who could be aggressive for a Sponsor with limited net worth and liquidity. Fixed for 10 years at 4.50%, the recourse loan was sized to 75% of the total capitalization with no prepayment penalty. Previously financed by a 100% loan to cost construction loan, the subject property had recently been completed and occupied. GSP worked closely with the investment sales broker to assist in supporting the asset value to our niche lender.
$14,950,000 Non-Recourse Financing for the Acquisition of a 17-Property Single Tenant Dollar General Portfolio
June 5, 2019
GSP successfully placed $14,950,000 of non-recourse, 14-year (with an anticipated repayment date ten years from the initial closing) fixed-rate debt for the acquisition of 17 newly-constructed freestanding retail buildings 100% leased to Dollar General. The individual assets have 15-year lease terms and are located primarily in tertiary Upper Midwest states. GSP executed the financing concurrent with construction completion and sourced a lender able to provide 75% leverage financing at a 4.52% blended fixed coupon with five years of Interest Only payments, despite an absence of sales history and concurrent tenant lease terms expiring one year after loan maturity. The loan structure also provides the Sponsor flexibility to release properties from the loan collateral in the event of sale after year three of the loan term and allows the Sponsor to release up to 30% of the individual assets from the mortgage collateral and substitute like kind properties through year nine of the term.
May 1, 2019
George Smith Partners arranged $8,740,000 of acquisition financing for an owner user retail property in Los Angeles. The Sponsor had been introduced to GSP after they received a loan cancellation from their direct bank. GSP jumped into the loan process right away and worked with the Sponsor, their CDC and the new Lender in order to ensure closing in a timely matter. The selected Lender that GSP brought in was able to give the Sponsor a much more aggressive interest rate than their direct lender had promised in their LOI. This ended up saving the Sponsor 67 bps on the interest rate and over $240,000 in interest during the first 10 years of the loan.
Rate: 4.57% fixed
Term: 10 years
Amortization: 25 years
Loan to Cost: 91.1%
Lender Origination Fee: None
- Advisors: Reuven Risch
$12,790,000 Non-Recourse Acquisition Bridge Financing to Reposition a 120,000 Square Foot Retail Center in Phoenix, Arizona
January 30, 2019
George Smith Partners secured $12,790,000 in non-recourse acquisition bridge financing for the heavy reposition of a 1980s vintage shopping center in the Paradise Valley submarket of Phoenix, Arizona. The value-added property had a vacating grocery anchor tenant, low occupancy rates and below market rents. The Sponsor’s business plan was to acquire the asset with a fitness tenant anchor in tow and then reposition and stabilize the remainder of the center.
Sized to 80% of total project cost, the loan includes a future funding facility to cover tenant improvements, leasing commissions and capital expenditures. The rate floats at 1 Month LIBOR plus 4.25% (approximately 6.75% today) and carries a two year term with two one year extension options. Interest is not charged on the holdback until funds are drawn. The Lender was able to accommodate several changes to the business plan throughout the application process. This included relocating several existing tenants within the center due to a conflict presented in existing tenant leases.
$10,200,000 Acquisition Financing for Two Single-Tenant, NNN Retail Properties Albuquerque & Silver City, NM
December 19, 2018
George Smith Partners successfully placed $10,200,000 of acquisition financing ($5,100,000 each) for the purchase of two single-tenant, NNN-lease Albertsons in Albuquerque (52% LTV) and Silver City (65% LTV). The Albuquerque store measures 65,413 square feet, 7.48 acres, and the Silver City store measures 39,385 square feet, 4.81 acres. Albertsons currently has 12+ years remaining on each of the leases. The Sponsor is structured as a TIC and identified these properties in a 1031 exchange.
To mitigate rising interest rate risk, the Lender locked the rate at application, two months prior to closing. The 7-year loans are amortized over 25 years, include step-down prepayment penalties, and have a fixed interest rate of 5.19%.
December 5, 2018
George Smith Partners secured $8,700,000 of non-recourse, bridge acquisition financing for a 45,000 square foot retail center located in Richardson, TX. The Center, which was built in 1985, has a diverse mix of regional tenants and sits on the corner of two of the main thoroughfares in the area.
The Sponsor purchased the Property with the intent to add value through two approaches: (1) increasing rents for tenants that are rolling and paying below-market rates, and (2) constructing an additional 12,000 square feet on undeveloped land within the parcel. There were complications with parcelizing the existing building and the land, which meant that a single lender needed to fund the entire project. The large renovation and construction budget also resulted in only 41% of the total loan being funded at closing.
George Smith Partners identified a lender that could structure the financing to have two holdback reserves, one for the CapEx and TI/LC’s for the existing space and the other dedicated to funding the construction of the new building. The separate reserves allow the Sponsor to pursue both value-add opportunities simultaneously, which drastically reduces the project timeline and maximizes the Sponsor’s IRR. Our capital source was able to get comfortable with the construction component by requiring 75% of the space to be pre-leased prior to funding.
May 2, 2018
George Smith Partners secured $38,750,000 of acquisition financing for the purchase of a retail assemblage in West Hollywood, CA. The Assemblage is currently 100% occupied on month-to-month leases and provides sufficient cash flow to cover all operating and debt service costs. The Sponsor purchased the property with plans to entitle for a mixed-use project which would include condos and a hotel. The lender was able to get comfortable with the entitlement risk due to the Sponsor’s strong track record in the market, the irreplaceable location, and the ability to generate significant additional revenue through already approved billboards. The recourse loan was sized to 62% of as-is LTV, 70% LTC, and is priced at LIBOR + 3.75%. The financing has a 3-year term with a 1-year extension and a stepdown prepayment.