$5,375,000 Acquisition Financing for Los Angeles In-Line Retail

Transaction Description: George Smith Partners successfully secured the $5,375,000 acquisition loan for the purchase of a Los Angeles in-line retail center. Sized to 65% of the purchase price, the loan is fixed for 5 years at 4.15% before floating at 2.5% over the 5 year CMT for the remaining 10 years of the term. Underwritten for a 25 year amortization schedule, there is no prepayment penalty for the 49,235 square foot collateral.

Challenge: Physical occupancy was 75% at funding. Institutional permanent debt providers traditionally require 80% occupancy or more by close. The MAI appraisal needed to use a 5% vacancy factor in order to support the value and maintain loan proceeds and terms.

Solution: GSP obtained historical data which proved the property consistently operated at over 90% occupancy for prior five years. Our Sponsor’s extensive experience leasing and stabilizing retail properties allowed us to gain a Policy Exception that generated competitive pricing and leverage. Market data supported the higher occupancy and allowed the MAI appraiser to underwrite to historical and market standards rather than the current “snap shot” occupancy.