$4,700,000 In-Line Retail Acquisition Financing to 75% of Purchase

Transaction Description:

George Smith Partners successfully placed the acquisition financing of a multi-tenant strip center located in Ventura, California. The 24,500 square foot center, anchored by Pep Boy’s, Frazee Paint and a Sizzler Restaurant, was acquired as the replacement property for a 1031 exchange. Sized to 75% of purchase, the 10 year loan is fixed for 5 years at 4.25% before floating over Prime. Amortized over 30 years, there is no pre-payment penalty for this recourse loan.

Challenge: A 4,000 square foot space had remained vacant for more than 3 years, adding to the challenge to secure necessary loan proceeds required to fund. The appraiser also struggled with how to value this space given the length of vacancy. The buyer’s exchange deadline to close escrow was approaching and available cash equity was limited to 25% of purchase.

Solution: Mr. Stein identified a portfolio lender with who is very active in the Ventura commercial market. GSP successfully demonstrated to the lender that the seller had little retail experience and refused to consider viable leasing opportunities for the vacant space. A local leasing agent confirmed a list of possible tenants for the vacant space. The Borrowers’ business plan combined with his retail resume offered additional comfort to the appraiser and lender that the vacancy would be leased shortly post-close.