Don't Miss a Fact,
Sign Up for FINfacts!

FINfacts is a weekly newsletter highlighting recent financings and economic insights.

Subscribe Here

$7,600,000 Permanent Financing on a 120,000 sf Shopping Center; Northern California

Rate: 3.73% Fixed
Term: 10 years
Guaranty: Non-recourse except for Bad Act or Environmental
Lender Fee: Par

Transaction Description:

George Smith Partners successfully arranged $7,600,000 in permanent financing for a non-traditional anchored shopping center in Northern California. The Big Lots and Dollar Tree anchors had short terms remaining on their primary leases and they both had exceptional health ratios (occupancy cost/total sales). The other two non-credit anchors are doing well. During the Covid-19 pandemic, our Sponsor lost a restaurant tenant and provided rent relief for some of the other tenants. Today, all the tenants are currently paying their rents in full.

Advisors

Related Financings

  • $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

  • $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.

    Rate: SWAP + 193
    Term: 10 Years
    Amortization: 10 Years Interest Only
    LTV: 65%
    Guaranty: Non-Recourse

  • $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.

    George Smith Partners secured 10 years of permanent financing with full-term interest-only in a financial environment that continues to be cautious towards retail. GSP negotiated competitive pricing at the desired level of proceeds and guided the deal to a successful closing.

    Rate: 10-Year Swap Rate + 185 bps; 3.31% Fixed
    Term: 10 Years
    Amortization: 30 Year, 10-Year Interest-Only
    LTV: 65%
    Prepayment: Defeasance
    Guaranty: Non-recourse except for “bad acts” and environmental

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

    April 14, 2021

    Transaction Description:

    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.

    GSP was able to ensure competitive pricing and proceeds based on having a best-in-class sponsor and strong and diverse anchors. Although interest rates climbed over 60 basis points during the diligence, the Capital Provider did not change loan proceeds.

    Rate: 3.45%
    Term: 10 Years
    Amortization: 3 Years Interest Only, then a 30-year amortization
    Prepay: Yield Maintenance calculated until last 6 Months which are open with no penalty
    Guaranty: Non-recourse except for “bad acts” and environmental

  • $6,790,000 Permanent Cash Out Financings for Walgreens and Jack in the Box; Murrieta, CA

    June 10, 2020

    Transaction Description:

    George Smith Partners arranged two loans totaling $6,790,000 in permanent financing with over $1,500,000 cash out for a freestanding Walgreens and Jack in the Box located in Antelope Square Shopping Center in Murrieta, California. Both loans are fixed for 5 years at 2.87%, which is one of the lowest fixed rate financings ever closed by GSP. Just as GSP went into application the impacts of Covid-19 resulted in Jack in the Box ceasing rent payments and many capital providers putting a pause on new deals. GSP was able to negotiate a high leverage, cash out refinance with no warm body for carve-outs. The Sponsor also agreed to hold back principal and interest reserves on the Jack in the Box.

    Rate: 2.87% Fixed
    Term: 5 Years
    Amortization: 30 Years
    Combined LTV: 65%
    Prepayment: 3,2,2,1,0
    Guaranty: Carve-outs to entity, no warm body

  • Low Debt Yield, 3.77% Coupon Permanent Financing for the Acquisition of a Recently Developed Grocery-Anchored Retail Center; FL

    September 25, 2019

    George Smith Partners successfully placed $14,690,000 in non-recourse, ten-year fixed rate first mortgage debt for the acquisition of an approximately 54,000 square foot, 96% occupied, recently developed retail center in Western Florida. An investment-grade grocery anchor on a newly signed long-term lease comprises approximately 75% of the collateral. The anchor has no sales history at the Property and is not required to report sales going forward. GSP sourced a lender to provide full term non-recourse Interest-Only financing subject to a low 7.35% debt yield. The 65% leverage loan has a 3.77% fixed coupon over the ten-year term.

    Rate: 3.77%, Fixed
    Term: 10 years
    Amortization: Full Term Interest-Only
    Loan to Value: 65%
    Prepayment: Defeasance
    Lender Fee: None