$3,500,000 Refinance of a 3-Tenant Industrial Property; Pasadena, CA

Rate: 3.45% Fixed
Term: 5 Years
Amortization: 25 Years
LTV: 44%
Guaranty: Recourse

Transaction Description:

George Smith Partners successfully secured a $3,500,000 permanent refinance of a 3-tenant, 29,000 square foot industrial property in Pasadena, CA. The Sponsor wished to refinance into a lower interest, fixed rate loan as quickly as possible due to the conversion of the existing loan from a fixed rate to a variable rate. GSP obtained a significantly lower rate thanks to the Lender not having a rate floor. This greatly benefited the Borrower in the fluctuating Treasuries environment. In addition, GSP’s strong relationship with the Lender and reliable execution enabled a smooth and timely closing process.


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    $7,800,000 in Permanent Financing for a 247-Unit Apartment Multifamily Project; Indianapolis, IN

    October 16, 2019

    Transaction Description:

    George Smith Partners secured $7,800,000 for the cash-out, refinance of a newly renovated, class B, 246-unit multifamily building located in Indianapolis. The structure allowed the Sponsor to pull out over $2,000,000 in cash and leave in place an affordable grant loan that was awarded to the Property for maintaining a certain number of affordable units.

    The Sponsor is a regional multifamily owner who has a strong relationship with an international bank. The in-place loan was originated by the Sponsor’s relationship bank. There were only three months of results after renovations. Due to the lack of results, the current Lender’s proposed offer to refinance the Property did not give the Sponsor credit for the upgrades and increased rents. It also would have required the payoff of an attractive loan from the City.

    GSP identified a national balance sheet lender that understood the strength of the asset, improvements and experience of the Sponsor. Using our vast experience in understanding this type of asset and proving out the large future increases in cash flow, GSP was able to secure financing that was far superior and allowed for cash-out to the Sponsor. The financing also allowed for the affordable grant loan to remain in place. GSP was able to negotiate no lender fees or prepayment. The loan GSP secured allowed for higher proceeds, cash out, longer term, and an overall lower cost.

    Rate: 4.40%
    Term: 7 Years Fixed / 30 year Term
    Amortization: 30 Years
    LTV: 75.0%
    Guaranty: Recourse
    Prepayment: None
    Lender Origination: None

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    $22,367,000 Cash-Out Refinance of 200 Secondary Market Rental Units, CA

    March 20, 2019

    Transaction Description:

    GSP placed the $22,367,000 non-recourse cash-out permanent loan for 200 stabilized units in a secondary California market. This represented a substantial return on equity. Loan proceeds were increased post application as the supportable underwritten net cash flow improved during the due diligence process. Occupancy constantly operated at 98% with future increases forecasted at unit turn. Fixed for seven years at 4.73%, the non-recourse loan is interest-only for two years prior to amortizing over 30 years for the balance of the term.

    Rate: 4.73% Fixed
    Term: 7 Years
    Amortization: Two Years Interest Only; 30 Years Thereafter
    Loan-to-Value: 60%
    DCR: 1.35
    Recourse: Carve-Outs Only
    Prepayment: Loss of Yield
    Loan Fee: 0.50%

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    Refinance of Prime Los Angeles Retail Shopping Center; Fixed at 4.715% for 10 Years

    September 4, 2018

    George Smith Partners secured a 10 year permanent refinance loan for a 17,054 SF retail strip mall shopping center located in a prime neighborhood in Los Angeles. The Property has prominent signage and easy access from a highly trafficked intersection. Several of the tenants have been in place for over 20 years and have a loyal and repeat customer base.

    The Borrower sought a low leverage rate and term refinance but required a flexible prepayment penalty in case he decided to redevelop the Property. The Property also has an onsite dry cleaner that does not use a green cleaning process. The presence of the dry cleaner mandated a Phase II report that would require drilling. In addition, the Property has several tenants that operate under short term leases.

    Instead of a Phase II report, the selected Lender estimated a Maximum Expected Loss if environmental remediation were required. The MEL was deducted from the appraised value of the Property. Since the loan still met the Lender’s LTV constraint, no further environmental testing was required. The Lender’s concern about short term leases was addressed by demonstrating that the Tenants had been located in the Property for many years. Overall, the Property had very little turnover due to the Owner’s skillful management. As a result, the Lender was comfortable with the consistency of cash flow at the Property.

    Rate: Fixed for 10 years at 4.715%, followed by floating at 6 month LIBOR plus 2.25%
    Term: 25 years
    Amortization: 25 years
    Prepayment Penalty: 5,4,4,3,2,1
    LTV: 45% maximum
    DCR: 1.5
    Origination Fees: Par

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    $7,000,000 Permanent Refinance for a 53-unit Multifamily Portfolio in West Hollywood

    August 15, 2018

    Transaction Description:
    George Smith Partners secured $7,000,000 for the cash out refinance of three stabilized multifamily buildings in West Hollywood containing a total of 53 units. Constructed in the late 1930s and late 1940s these buildings are situated on one of the most sought after streets in West Hollywood and in close proximity to popular restaurants, bars and entertainment. Fixed at 4.55% for seven years, the non-recourse loan floats at 6 month LIBOR + 2.25% for the remaining 23-year term. The non-recourse loans are fully amortizing and have a 5,4,3,2,1 step down prepayment penalty.

    Many of the buildings have long term residents who have lived at the properties for over a decade. The long term residency leaves the owner with dozens of units with uncaptured market rents, ultimately affecting the amount of loan proceeds.

    GSP worked with a lender who understood the strength of these assets and was able to underwrite to a 1.15x DCR at the actual note rate. Our Capital Provider was comfortable with the future upside of the properties as the Sponsor has plans to raise units to market rent as tenants vacate.

    Rate: 4.55% fixed for 7 YRS, then 2.25% over 6-mo LIBOR
    Term: 30 years
    Amortization: 30 Years
    Prepayment Penalty: 5,5,4,4,3,2,1
    LTV: 65%
    DCR: 1.15
    Guarantee: Non-Recourse

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    Cash-Out Refinance for 3 Car Wash Portfolio in Southern California

    November 1, 2017

    George Smith Partners arranged a refinance for three Southern California car washes. The Sponsor requested a five year fixed rate execution to mitigate interest rate risk and a ten-year term to mitigate maturity risk. George Smith Partners identified a lender comfortable with the location, strong historic cash flow and deep real estate experience. Fixed at 4.87% for 5 years, the loan offers a flexible 3-2-1 prepayment penalty. The loan did not carry a lender fee.

    Rate: 4.87% Fixed Rate for 5 years
    LTV: 60%
    Term: 10 Year, 3-2-1-Open Prepay
    Amortization: 25 year
    Guarantee: Recourse

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    $5,100,000 Refinance of a 66 key all-suite Best Western in Southern California

    May 10, 2017

    George Smith Partners secured $5,100,000 in proceeds for the refinance of a 66 key all-suite Best Western in Southern California. The loan was priced over the 10 year treasury. The rate was locked at application to eliminate interest rate risk.  GSP was able to identify a balance sheet lender who would be able to fund prior to the client’s original loan maturity date, provide straight forward loan documents with no legal fees, and provide an efficient due diligence process. The lender was flexible with regard to ownership structure and future partnership buy-out provisions. The loan was approved in a timely manner and closed 45 days after signed application.

    Rate: 10 YR Treasury + 214 (locked at Loan Application at a 4.49% coupon)
    Term: 25 years (10+10+5 years)
    Amortization: 25 years
    Prepayment: Yield Maintenance
    Loan to Value: 33%
    Lender Fee: 0.50%
    Guaranty: Recourse

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