$4,700,000 Non-Recourse Permanent Financing for a Single Tenant Walgreen’s

Transaction Description:  GSP successfully placed the no-cash-out refinance of an investment grade single tenant retail property built in 2002. The 13,376 square foot asset had 8 years remaining on the lease at the time of funding. The 15 year fixed rate loan has a step-down prepayment. The lender did not require an appraisal or Phase I report for funding. Closing costs including third party reports and legal fees were capped at $5,000. The rate was locked at application for 120 days without cost or additional rate lock deposit.

Challenge: Most lenders are not comfortable with 8 years remaining for a single-tenant building. The Sponsor required a lender who would not structure a yield maintenance or defeasance for this non-recourse loan. Store sales were not available for this location. Certainty of execution was vital as the existing loan was maturing in less than 45 days.

Solution: Due to the low leverage and the excellent location of the property, GSP was able to structure a non-recourse loan with a step down prepayment penalty from a portfolio lender. All lender concerns on lease event risk and lack of store sales were mitigated through the loan structure, credit quality of the tenant and financial strength and operating experience of the Sponsor even though there is no repayment guarantee.