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75% Leverage, 4.95% Coupon Non-Recourse Permanent Financing for a Neighborhood Retail Center in a Tertiary Southwest Market

Rate: 4.95%, Fixed
Term: 10 years
Amortization: 1 Year Interest Only; 30 Year Amortization thereafter
Loan to Value: 75%
Prepayment: Yield Maintenance
Lender Fee: None

Transaction Description:

George Smith Partners successfully placed $15,000,000 of non-recourse, ten-year fixed rate first mortgage debt for the acquisition of an approximately 90,000 square foot, 1980’s vintage, 99% leased multi-tenant retail property. The anchor, a privately-owned regional grocer, occupies almost 50% of the collateral’s total square footage and has a lease expiration approximately concurrent with loan maturity. GSP sourced a lender able to achieve 75% leverage non-recourse financing plus one year of Interest Only payments despite the tertiary location and lack of access to the grocer financials. The loan was sized to the greater of an 8.65% debt yield or 1.30x debt service coverage ratio on the 4.95% fixed rate coupon.

Related Financings

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    February 8, 2024

    Transaction Description: 

    George Smith Partners successfully arranged a $13.5 million refinancing on behalf of the owners of The Glen Centre, an irreplaceable 44,000 square-foot boutique retail center located in the heart of the Beverly Hills/Bel Air area.

    Originally financed 10 years ago by GSP, the new 5-year loan was used to refinance existing CMBS debt on the property that was coming due in February 2024. Serving the surrounding Bel-Air/Beverly Hills community since 1978, this irreplaceable asset was one of L.A.’s first true community shopping centers, designed to meet the needs of surrounding residents by offering one-of-a-kind shops, restaurants and convenient services in a beautiful park-like setting.

    Lender Type: Commercial Bank

    Amount: $13,500,000

    LTV: 40%

    Rate: 285+1-Month SOFR

    Term: 5-years

    Origination Fee: 0.25%

    Prepayment: Open/At-Par

  • $10,250,000 Permanent Financing for 100,000 SF Grocery Anchored Shopping Center; Northern California

    October 4, 2023

    Transaction Description:

    George Smith Partners arranged 5 year, permanent, non-recourse, interest only financing for an 85% occupied, multi-tenant shopping center in Northern California. The Property is a neighborhood center with 20 tenants and anchored by an independent grocery chain with about 20 locations in 5 states. The grocer has a long history at the center with over 25 years and multiple lease renewals. Other tenants include a mix of local and national chain restaurants, dental care, hair care, and a pre-school. The Sponsor was able to execute new financing near their existing loan maturity. Choosing a 5 year structure allows flexibility in the next 3 or 4 years and minimize prepayment costs. The CMBS financing allowed for a cash-neutral, non-recourse refinance in a volatile capital markets environment.

    Rate: 7.88%
    Term: 5 Years Fixed
    Amortization: Interest Only
    LTV: 50%
    Prepayment: Defeasance
    Lender Fee: 1%
    Guaranty: Recourse

  • $7,700,000 Programmatic Equity Financing for 151-Unit Portfolio; Washington, DC

    August 23, 2023

    Transaction Description:

    George Smith Partners has successfully arranged a Programmatic Joint Venture Equity Structure valued at $7,700,000. This strategic arrangement will provide funding for three affordable multifamily projects in Washington DC. These Projects encompass the recapitalization of a fully stabilized property consisting of 49 units, the minor rehabilitation of 56 existing units, and the construction of 87 new ground-up units.

    GSP skillfully orchestrated a programmatic equity agreement that provides investors with improved returns spanning a prolonged period. Consequently, the Sponsor and GSP collaboratively endeavored to secure a steadfast equity provider for their upcoming ventures. Simultaneously, the equity provider gains the privilege of tapping into the sponsor’s expansive project pipeline, thereby opening doors to potential future funding returns.

  • $4,760,000 Acquisition Bridge Financing for Vacant Retail/Restaurant Building; Los Angeles, CA

    August 16, 2023

    Transaction Description:

    George Smith Partners secured a $4,760,000 acquisition loan for a vacant 12,300 square foot retail property in Los Angeles, CA. The Lender provided proceeds of 70% of the acquisition price at a rate of 7.325%, fixed for the first three years. The loan was closed with a regional bank.

    The Property was delivered as a vacant shell. The buyer intends to lease it to restaurant and retail tenants. Given the current market volatility, most of the other quotes were from private money lenders at much higher rates. To support the purchase price and future valuation, an extensive set of sales and lease comps were provided to the lender and the appraiser. The Borrower’s track record of success with similar properties demonstrated their ability to execute their business plan.

    Rate: Fixed for 3 Years at 7.325%, then Floating
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    Amortization: 1 Year Interest Only followed by 25-Year Amortization
    Prepay: 3, 2, 1, 0%
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    DCR: 1.25x at Stabilization

  • $3,650,000 Permanent Financing for Office & Retail Property; Santa Barbara, CA

    July 5, 2023

    Transaction Description:

    George Smith Partners successfully closed a refinance of a mixed-use office and retail property in Santa Barbara with a life insurance company. Despite the current market hesitation towards office properties, GSP was able to secure 10-year, fixed-rate financing given the lower leverage. GSP identified a Lender that was comfortable with the office component due to the 30+ small office users and no significant rollover risk. The largest tenants are a restaurant and movie theater which have been in occupancy for over 20 years.

    Rate: 5.93%
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  • $9,327,000 Acquisition Financing for Retail Portfolio; Multistate

    May 24, 2023

    Transaction Description:

    George Smith Partners successfully arranged $9,327,000 in acquisition financing for the purchase of three prime retail properties adjacent to top colleges across different states. The properties are all performing very well but do not have credit tenants. Overcoming the reluctance of regional banks to cross-collateralize and the high rates offered by many lenders, we sourced a national bank that could loan on all three properties. The lender provided a seven-year fixed rate term and 4 years of Interest Only payments. The strategic placement of these properties in prime locations is expected to drive significant value appreciation. By structuring the loans with low leverage, we allowed the Sponsor to complete a 1031 exchange. The cross-collateralized loan with release provisions allowed the seamless acquisition of the assets.

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    LTV: 50%
    Guaranty: Non-Recourse