$59,000,000 Non-Recourse Refinance of a Regional Power Center in a Tertiary Midwest Market

Rate: One-Month LIBOR + 3.70%
Term: Two years plus three one-year extension options
Amortization: Full-term interest only
Loan to Cost: 77%
Loan to Stable Value: 70%
Guarantee: Non-recourse
Lender Fee: 1.00%
Prepayment: 15-month spread maintenance

George Smith Partners secured $59,000,000 in non-recourse bridge debt to refinance out an existing construction loan currently in forbearance due to a maturity default. The maturity default was due to a longer-than-expected construction period to convert the former 1,000,000 square foot enclosed regional mall, located in a tertiary Midwest market, into an open-air, 750,000 square foot power center. The Property lost a few anchor tenants to bankruptcy, requiring the Borrower to re-lease those spaces in addition to the lease-up of new retail suites created by the power center conversion. The Property is now 91.5% leased but 85% occupied, and due to lease co-tenancy violations a major tenant is currently paying percentage rent in lieu of base rent. Loan proceeds repaid the existing construction loan, covered closing costs, and will fund 100% of future CapEx, tenant improvement, and leasing commission costs associated with stabilizing the Property. The loan offers a 24-month initial term plus three extension options with durations of one year each, which provide the Borrower maximum flexibility. The non-recourse floating-rate loan priced at 3.70% over One-Month LIBOR and offered full term interest only payments.

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