$7,050,000 Non-Recourse Cash-Out Refinance to 75% LTV

Transaction Description:  Founding Partner Gary M. Tenzer placed the $7,050,000 cash-out refinance of a 102,000 square foot Southern California self-storage facility. The non-bank CMBS originator allowed for loan structuring flexibility that is not traditionally afforded by FDIC regulated institutions. Fixed for 10 years, the non-recourse loan amortizes over 30 years. The 749 unit facility cash flows to a 9.0% debt yield. There was no lender origination fee.

Challenge: As the building had recently been converted from a distribution building to its current self-storage use, the asset was still in lease-up and lacked a meaningful trailing collection and expense history. A return of equity was also a requirement of this loan request.

Solution: GSP promoted the Sponsor’s financial strength and extensive experience developing and operating self-storage facilities. Mr. Tenzer identified a capital provider who underwrote the loan in advance of the property being fully stabilized and gave credit to the strong market characteristics and rapid lease-up. While equity was returned to the developer, the Sponsor still had real cash invested up and beyond his sweat equity. Supporting market demographics and positive leasing trends added comfort to the underwriters’ approval of this execution.