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$6,515,000 Unanchored Shopping Center Permanent Refinancing

Rate: 4.00%
Term: 15 year fixed rate loan
Amortization: 15 years
LTV: 75%
DSCR: 1.25x (underwritten based on the in-place income)
Prepayment: No prepayment penalty
Lender Fee: Par
Guarantee: Recourse

GSP successfully arranged $6,515,000 for the refinance of a 21-tenant unanchored retail center in a Southwestern MSA. The property was 85% occupied at the time of closing. GSP identified a lender who is comfortable with the sponsor’s market experience and the property’s leasing potential. Sized to 75% of value, the recourse loan is fixed for 15 years at 4%.

Advisors

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    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.

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  • $18,450,000 Permanent Financing for a 122,000 SF Grocery Anchored Shopping Center; Northern California

    October 6, 2021

    Transaction Description:

    George Smith Partners successfully placed $18,450,000 in permanent financing on a 122,000 SF grocery anchored shopping center located in Northern California amidst the COVID-19 pandemic. The Center is anchored by a 32,000 SF Smart & Final, a 26,000 SF Ross Dress for Less and a 22,000 SF Planet Fitness. Despite tenants demonstrating commitment to the space—with an average lease term of 15 years and consistent renewals—capital markets were cautious of financing retail and were specifically concerned with COVID-19 rent deferrals and closures due to the California directives and mandates. Furthermore, capital providers expressed uncertainty as to how retail centers would be impacted in the long run and the ramifications of the future post-pandemic retail environment. GSP was able to ensure competitive pricing and proceeds based on having a best-in-class sponsor and strong and diverse anchors, despite being in a cautious financial environment hesitant towards retail.

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  • Cash-Out 2.94%, $12,025,000 Non-Recourse Permanent Refinance on a 100% Leased Discount-Grocer Anchored Shopping Center; Western States

    August 4, 2021

    Transaction Description:

    George Smith Partners successfully placed $12,025,000 in non-recourse, cash-out permanent refinancing for a 101,096 square foot discount-grocer anchored retail shopping center in a transitory Pacific Southwest MSA. The tenant mix includes several national credit tenants along with local and regional stores, all of which remained in-place during COVID-19. GSP was able to identify a lender who understood the complexities of retail in a post COVID environment. The non-recourse permanent loan was sized to 65% of value, included 10-years of interest only payments at a fixed rate of 2.94% for 10 years. Lender fee is at par.

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  • $30,000,000 10-Year Interest-Only, Permanent Financing for 230,000 SF Grocery Anchored Shopping Center; Southern California

    July 21, 2021

    Transaction Description:

    George Smith Partners successfully placed $30,000,000 in permanent fixed-rate financing for a 230,000 SF infill Southern California retail center amidst the COVID-19 pandemic. As a market-leading retail center near local economic and transit hubs, the Property’s mix of need-based and experiential tenants proved resilient. Capital providers continue to be hesitant in financing retail but were specifically concerned with California’s mandates that impacted the operation of non-essential businesses. As non-essential businesses and experiential tenants comprise a significant portion of tenancy, this posed significant challenges. These included the temporary closure of a movie theatre with less than one year of primary lease term remaining and a fitness center that vacated during the pandemic.

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  • $14,000,000 3-Years Interest Only Permanent Financing for 150,000 SF Shopping Center with Non-Credit Grocer; Tertiary Market, Northern California

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    George Smith Partners successfully placed $14,000,000 in permanent financing on a Northern California non-credit grocery anchored center amidst the COVID-19 pandemic. Capital markets were wary of financing retail in general but were specifically concerned with tertiary markets and the recent bankruptcy of Chuck E. Cheese. Although tenant sales information was not required to be reported, they were anecdotally strong for the diverse arrangement of large tenants including Chuck E. Cheese. They affirmed their lease, even as COVID-19 was at its peak. Two tenants were closed due to the California directives and mandates. Capital providers were uncertain of what the post-pandemic environment would look like and how retail centers would be impacted in the long run.

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