$38,500,000 Cash-Out Refinance of 98% Leased Grocery-Anchored Retail Center; Utah

  • Loan Term: 5 Years, 1 year I/O
  • Rate: SOFR + 2.46%
  • LTV: 65%
  • Fee: 1%

Transaction Description:

George Smith Partners successfully placed $38,500,000 of floating-rate debt for the cash-out refinancing of a 372,000 square foot grocery-anchored retail center located in Utah. Fully leased and anchored by tenants like Super Target, Best Buy, and PetSmart, the Property boasts a dominant submarket position owing to its diverse assortment of community-oriented tenants and main-and-main location. Additionally, the Sponsor had expertly navigated the difficult market conditions caused by the Covid-19 pandemic, notably through subdividing and re-leasing 45,000 SF of space to credit-rated tenants at a rent 70% higher than the previous occupant, which had vacated due to bankruptcy. Loan proceeds were used to pay off existing debt, fund tenant improvements, and leasing commissions, and repatriate Sponsor equity.

Most non-CMBS lenders contacted had sought a full repayment guaranty because of the retail asset class. However, GSP successfully sourced a flexible lender willing to structure recourse with a 25% springing repayment guaranty, which would only come into effect only if an anchor tenant terminated their lease or ceased operations. Furthermore, the Property’s strong sponsorship and well-executed business plan effectively aided GSP to source debt with an extremely competitive rate and significant cash-out at close.

  • Loan Term: 5 Years, 1 year I/O
  • Rate: SOFR + 2.46%
  • LTV: 65%
  • Fee: 1%

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