$85,200,000 Acquisition Financing of a Regional Retail Power Center in Suburban Utah

Rate: 30-Day LIBOR + 2.40%
Term: Three years plus two 12-month extensions
Amortization: Interest Only during Initial Term
Max Loan to Value: 60%
Prepayment: 1% months 1-12; open thereafter
Lender Fee: 0.75%

GSP arranged $85,200,000 in non-recourse acquisition funding for an approximately 60-acre, double grocer-anchored Utah power center 86% leased to over 60 national and local tenants.

The 60% leverage loan on almost 700,000 square feet of retail space was 100% funded at acquisition and allows flexibility for the release of collateral during the term at the borrower’s option, subject to predetermined paydowns. This structure affords the sponsor the opportunity to pursue concurrent business plans of leasing the overall shopping center up to market occupancy while simultaneously selling off individual parcels to NNN lease investors subject to market demand.

The non-recourse loan priced at one-month LIBOR plus 2.40% and required a LIBOR cap with a 3.50% strike price. The borrower elected to purchase a 24-month cap at closing, however the lender structured the cap term in 12-month increments to reduce the overall cap cost to borrower by shortening the cap’s duration. The loan features Interest Only payments for the three-year initial term in order to maximize cash flow available for distribution to investors. The loan is open for prepayment at any time subject to a 1% fee during the first 12 months, and is open for prepayment at par thereafter.

Advisors

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