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$6,200,000 Non-Recourse Construction Loan for 27,300 SF, 100% Pre-leased Shopping Center; Moreno Valley, CA

Rate: 8.00%
Term: 18 months + two 6-month options
LTC: 90%
Guaranty: Non-Recourse

Transaction Description:

George Smith Partners successfully arranged $6,200,000 in non-recourse construction financing for a 100% preleased, 27,300 SF grocery-anchored shopping center in Southern California. Positioned in a strong retail corridor with high traffic counts, the Sponsor assembled a stellar mix of tenants, two of which were on ground-leases, and the other two requiring build-to-suits. With highly experienced Sponsorship, the Project was significantly de-risked with signed leases and approvals for a tentative parcel map. As a result, GSP was able to source competitive financing with exceptionally high leverage that co-align with the Sponsor’s investment plan and market outlook.

Advisors

Related Financings

  • $4,875,000 Acquisition Financing for an 88% Occupied Neighborhood Strip Center; Ventura County, CA

    May 4, 2022

    Transaction Description:

    George Smith Partners successfully arranged $4,875,000 in acquisition financing for a non-grocery anchored retail shopping center in Ventura County. The Subject Property took a minor hit with rent collections during the Covid-19 pandemic and had many month-to-month tenants. GSP was able to illustrate to the Capital Provider how the Subject Property has rebounded nicely since then and has only been increasing in cash flow. GSP identified a Capital Provider who was comfortable with the mom-and-pop tenants, required no holdbacks of any sort for the vacant units, required no deposits to be held at their branch and provided a flexible prepayment penalty structure.

    Rate: 4.00%
    Term: 5 years fixed
    Amortization: 30 years
    LTV: 65%
    Prepayment Penalty: 5/4/3/0/0
    Banking Relationship/Deposits Required: None
    Guaranty: Recourse

  • $3,000,000 Non-Recourse Acquisition Loan for 20,000 SF Office/Retail Building; Sacramento, CA

    March 16, 2022

    Transaction Description:

    George Smith Partners successfully arranged $3,000,000 in acquisition financing for a 20,000 SF office/retail single story building in Sacramento. The Seller will occupy the Property paying no rent but will cover the operating expenses until the client provides 90 days’ notice to vacate. Centrally located in Midtown Sacramento, the Sponsor purchased the property for its land value, as they will entitle and assemble adjacent properties to be developed into a new ground-up multifamily project. Requiring a three-week closing timeline over the holiday season, George Smith Partners successfully sourced financing within the tight schedule.

    Rate: 6.40%
    Term: 18 months
    LTC: 60%
    Guaranty: Non-Recourse

  • $29,250,000 Senior Construction Financing for a Mixed-Use Development; Bellflower, CA

    February 16, 2022

    Transaction Description:

    George Smith Partners placed a $29,250,000 senior construction loan for a ground-up development of a mixed-use project in Bellflower, CA. When complete, the 5-story Project will consist of 91 apartment units and approximately 14,550 SF of 1st-floor commercial/retail/restaurant space. The Subject is located at the northern boundary of the Downtown Bellflower District and is an integral component of the city’s TOD Specific Plan. When complete, residents will be able to access LAX, the South Bay, and DTLA via the Blue and Green Metro lines.

    As the marquee development for the Bellflower TOD Specific Plan, few comparable projects were available in proximity to the Project site. GSP focused interested lenders on the supporting employment centers within a twenty-minute driving distance, including seven medical centers inside of a 5-mile radius. Additionally, while few Class-A style multifamily properties currently exist near the site, GSP used submarket data to show that demographic trends within the immediate area support the need for new product. GSP executed a broad and in-depth marketing campaign to help capital markets understand the opportunity.

    Rate: Prime + 0.75%; Floor 4.375%
    Term: 24 Months + three, 6-Month Extension
    Stabilized Loan-To-Value: 65%
    LTC: 72%

  • $27,000,000 Non-Recourse Financing with Cash Out for 360,000 SF Retail Center; Colorado Springs, CO

    December 15, 2021

    Transaction Description:

    George Smith Partners has secured $27,000,000 in non-recourse debt financing for a 360,000 SF retail center in Colorado Springs, CO. The Property features many popular national retail and restaurant chains and is shadow anchored by Lowe’s Home Improvement. Due to some pandemic related tenant credit issues the Property faced 68% occupancy levels for a brief period. However, through strategic releasing efforts, the Property has since been released to strong new tenants for over 90% of the net leasable area.

    The loan was structured to provide fresh reserves for the Sponsor to pay remaining tenant improvement and leasing commissions for the newly tenanted spaces as well as to refinance the existing bridge loan, which had reached maturity. In addition, the Lender provided the Sponsor with additional cash-out proceeds to pay down debts on other Sponsor-owned properties.

    Challenges:

    The Sponsor originally requested long-term fixed rate debt with maximum cash out. However, due to the near-term maturity of the existing bridge loan and the non-stabilized NOI, another bridge loan was needed to allow the NOI to season for another year, prior to arranging permanent financing.

    Solutions:

    The GSP team was able to solve for these challenges by highlighting the increased leasing activity since the pandemic as well as the Sponsor’s forty-year history and familiarity with the Property. GSP identified a new bridge lender comfortable with the Property’s dominant position in the market, the recent leasing activity and future leasing potential. GSP worked creatively and strategically with the Lender to structure an 18-month loan with two extension options. This will allow the new tenants to take occupancy. In addition, the NOI will be able tore-stabilize which will position the Property to achieve permanent financing as an exit strategy to repay the new bridge loan.

    Rate: 9.0% Fixed, Interest Only for 6 Months
    Term: 18 Months, with two 6-Month Extension Options
    LTV: 65% (Plus CAPEX)
    Origination: 1.75%
    Guaranty: Non-Recourse

  • $16,100,000 Cash-Out Permanent Financing for a Theater Anchored Shopping Center; Dardenne Prairie, MO

    November 29, 2021

    Transaction Description:

    George Smith Partners arranged the cash-out permanent refinance of a 153,726 SF grocery-anchored retail community center in Dardenne Prairie, MO, about 30 miles west of St. Louis. The Subject Property is anchored by Schnucks and Marcus Theater and is also shadow anchored by Target, which is under separate ownership. The loan is sized to 62% LTV, fixed for 5 years with 20 years amortization.

    The Sponsor approached GSP to arrange a non-CMBS loan resulting in $4,000,000 cash-out. The proceeds were used to buy-out his partners and lower the debt service from their previous loan. The theater component, along with a decreased appetite for retail lending due to market conditions made it difficult for capital providers to get comfortable with the asset type and cash-out. GSP identified a lender who was willing to provide a higher loan to value and competitive terms that maximize the Sponsor’s cash-out.

    Rate: 3.95%
    Term: 5 year fixed rate
    Amortization: 20 Years
    Loan to Value: 62%
    Prepayment: 2,1,0
    Guaranty: Full Recourse

  • $9,345,500 Acquisition Financing for 3 Single Tenant Drug Stores (2 CVS and 1 Walgreens)

    October 6, 2021

    Transaction Description:

    George Smith Partners arranged 3 separate loans with a single portfolio lender for our Sponsor’s acquisition of 3 drug stores from 3 different sellers. Timing was critical as 2 of the Property acquisitions were part of a 1031 exchange nearing the deadline. The fixed rate financing with no prepayment gives the Sponsor maximum optionality with no rate risk. The Sun City Seller had to delay closing due to a defeasance issue. This resulted in a mid-process strategy shift. That property was removed from the exchange and the Omaha property was added to the exchange. GSP worked with the Lender and all counsels to have those 2 loans re-documented with new ownership structures to accommodate the exchange.

    CVS – Sun City, AZ
    20-year lease term
    Loan Amount: $2,372,500
    Rate: 3.29%
    Term: 10 years, rate adjusts after year 5
    Amort: 30 years
    LTV: 67%
    Prepayment: Prepayable anytime at par
    Guaranty: Recourse
    Lender Fee: 0.25%

    Walgreens – Omaha, NB
    15-year lease term
    Loan Amount: $4,410,000
    Rate: 3.74%
    Term: 10 years fixed
    Amort: 30 years
    LTV: 67%
    Prepayment: Prepayable anytime at par
    Guaranty: Recourse
    Lender Fee: 0.25%

    CVS – Davenport, IA
    12-year lease term
    Loan Amount: $2,563,000
    Rate: 3.29%
    Term: 10 years, rate adjusts after year 5
    Amort: 30 years
    LTV: 67%
    Prepayment: Prepayable anytime at par
    Lender Fee: 0.25%