Rate: One-Month LIBOR + 5.50%
Term: Two years plus two one-year extension options
Loan to Value: 80% (121% of Purchase Price / New Basis is 140% of Purchase Price)
Amortization: Interest only during the loan term
Guarantee: Non-recourse
Lender Fee: 1.00%
Prepayment: 1% for first 12 months; Open thereafter. Waived if lender does take-out.
Transaction Description:
George Smith Partners secured $43,500,000 in bridge financing collateralized by a 95% vacant, 2.2MM square foot industrial building in a secondary Midwestern market. The building was constructed through the 1950s and 1960s by a major retailer and used for many years as a major distribution center. As internet retail ate into the tenant’s business, the building slowly lost its business importance to the prior owner. The Borrower, a well known owner and operator in the area bought the Property off market unoccupied approximately one year ago and has been improving the property and been in leasing talks with an array of strong tenants. The lease that occupies 5% of the building is attributed to a third party logistics subsidiary of the Borrower.
Sized to 80% of stabilized value, proceeds from the bridge loan take out the Borrower’s original acquisition loan and bought out an institutional Preferred Equity investor. The Borrower now owns the property free of all third-party equity investors. Additional loan proceeds will also be used to cover closing costs and fund future work, including CapEx and leasing costs associated with repositioning the 60-year-old building. The financing secured by GSP not only allowed the Borrower to recap out their equity partner and claim exclusive ownership rights to the asset, but also gave them the final renovation dollars required to attract new tenants and eventually bring to Property to stabilization.
Advisors
Related Financings
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$22,000,000 Bridge Loan for Industrial Land in a Western State
December 7, 2023
Transaction Description:
George Smith Partners successfully arranged a $22,000,000 loan for 92 acres of entitled land in Apex, a pioneering new growth area in a Western State. While some of the adjacent land has recently traded, utilities and roads are currently under construction. The Sponsor will build over 1 million square feet of industrial buildings and is currently talking to potential equity partners. The Sponsor had retained a national mortgage brokerage company that was unable to locate any financing for the Sponsor. The Sponsor approached GSP eight weeks prior to their maturity date to assist in the refinance. GSP completed a full marketing and identified two competitive lenders that could reach the desired proceeds level and close quickly. One of the lenders had significantly more local market experience providing more surety of close.
Rate: Confidential
Term: 18 Months
Origination Fee: 1.5%
Exit Fee: 0.50%
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$3,000,000 Bridge to Permanent 5-year Loan for a Vacant Single Story 50,000 SF Warehouse; Western States
August 4, 2021
Transaction Description:
George Smith Partners successfully placed a $3,000,000 bridge to permanent loan to fund the purchase, tenant improvements, leasing commissions and carry (real estate taxes, insurance, and debt service) for a vacant 50,000 SF single-story warehouse. The deal presented a couple challenges; the Sponsor had credit issues and the building was 100% vacant. The strong sponsorship experience, low vacancy in the market and the building’s high-level of quality ameliorated these issues. Lastly, the transaction had to be completed within the tight time constraints of a 1031 exchange.
Rate: 4.25% During Construction, Five-year Treasury + 3.25% During Term
Term: 5 Years
Amortization: 25 Year
Prepayment: Term Period: 3%,2%,1%,0% -
Non-Recourse Bridge Acquisition Financing for Industrial Building; Gardena, CA
July 21, 2021
Transaction Description:
George Smith Partners successfully arranged a bridge acquisition financing for a single-tenant industrial building in Gardena, CA. The Property is 9,300 SF on an approximate 18,731 SF parcel. The previous owner occupied the space, and the building is now vacant. There was an existing environmental issue that limited the pool of interested capital providers. However, GSP leveraged its market expertise and relationships to identify a lender comfortable with the Property and Sponsor, who is a repeat client. GSP secured a 12-month, non-recourse bridge loan at 7.90% fixed with interest-only payments and no prepayment penalty. This will provide the Sponsor time to resolve the environmental issue, lease the Property and season it for permanent financing. The financing closed within 12 days of term sheet issuance.
Rate: 7.90% Fixed
Term: 12 months, with Extension Options
Amortization: Interest Only
LTP: 40%
Prepayment: None
Guaranty: None -
Non-Recourse Bridge Acquisition Financing for Industrial Building; Wilmington, CA
June 2, 2021
Transaction Description:
George Smith Partners successfully arranged bridge acquisition financing for a single-tenant industrial building in Wilmington, CA. The Property is 3,950 SF on an approximate 8,640 SF parcel. The previous owner occupied the Property, and the building is now vacant. GSP secured a 12-month, non-recourse bridge loan at 7.90% fixed with interest only payments and no prepayment penalty. This will provide the Sponsor time to lease the Property and season it for permanent financing. The financing closed within two weeks of term sheet issuance.
Rate: 7.90% Fixed
Term: 12 Months, with Extension Options
Amortization: Interest Only
LTP: 57%
Prepayment: None
Guaranty: None -
$5,376,000 (60% LTC) Bridge Loan for Cash-Out Refinance of Industrial Building; Northern California
March 24, 2021
Transaction Description:
George Smith Partners secured $5,376,000 of bridge financing for the refinance of a two-tenant industrial building in Fairfield, CA. The Property is favorably located within a mile of three major freeways and is only a 45-minute drive to both San Francisco and Sacramento. The building is currently 100% occupied, but there were cash-out proceeds required to reposition the Property to make it more attractive to potential buyers. The 26,000 SF building also has 95,000 SF of improved yard space adjacent, which is a major draw for the current tenants. GSP was able to secure a lender that could get comfortable with a majority of the income being derived from the yard space. The financing was comprised of a senior and a mezzanine loan. The blended terms provided a 60% LTC priced at 7.43% with a 1.20% origination fee. The 12-month terms provide the Sponsor the ability to execute his business plan.
Blended Rate: 7.43% Fixed
Term: 12 Months
Amortization: Interest Only
LTV: 60%
Loan Fee: 1.20%
Reserves: None
Prepayment Penalty: None
Guaranty: Non-Recourse for Senior / Recourse for Mezzanine Loan -
$13,800,000 Non-Recourse Bridge Financing for an Industrial Manufacturing Facility; California
March 10, 2021
Transaction Description:
George Smith Partners secured non-recourse bridge financing for a manufacturing facility in California. The Sponsor’s goal was to expand their manufacturing facility from 120,000 s.f. to 200,000 s.f. for their current tenant and provide them with clean manufacturing and dock high loading doors in the warehouse. GSP was able to secure a lender that found the location of the Property desirable due to the close proximity and access to major highways, the Tenant’s long-term investment in the building/equipment and most importantly, the Sponsor’s strong experience and track record.
Rate: 4.75%
Term: 5 Years
Amortization: Interest Only
Guaranty: Non-Recourse, Completion, Repayment, “Bad” Acts and Environmental
Lender Fee: 1.00%
