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
Related Financings
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$4,517,000 Acquisition of a Multi-Tenant Retail Center, Villa Park, IL; Non-Recourse
April 1, 2020
Transaction Description:
George Smith Partners secured $4,517,000 for the acquisition of a multi-tenant, retail center in Villa Park, Illinois. The non-recourse permanent loan is fixed at 3.75% for ten years with full-term interest only and a defeasance prepayment penalty structure.
One of the tenants was a newly opened gym franchise with no historical sales information for this center. Also, during the loan process, the Seller was finalizing a subdivision of the parking lot which required multiple levels of municipality approvals.
GSP identified a capital source who understood the strength of the asset, the experience of the Sponsor and its desirable suburb location, which is 20 miles outside of Downtown Chicago. The Capital Provider worked through the timing of the issuance of the subdivision approval and was able to close as soon as the approval was finalized. The efficiency of our Capital Provider allowed the Sponsor to be able to rate lock and close as soon as the approval was stamped, taking advantage of the low interest rate environment.
Rate: 3.75% Fixed for 10 years
Term: 10 years
Amortization: 30 years
Prepayment Penalty: Defeasance
DCR: 1.30x
Interest Only: 10 years
Guaranty: Non-Recourse
Origination Fees: Par- Advisors: Matthew Kirisits
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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 -
$12,790,000 Non-Recourse Acquisition Bridge Financing to Reposition a 120,000 Square Foot Retail Center in Phoenix, Arizona
January 30, 2019
Transaction Description:
George Smith Partners secured $12,790,000 in non-recourse acquisition bridge financing for the heavy reposition of a 1980s vintage shopping center in the Paradise Valley submarket of Phoenix, Arizona. The value-added property had a vacating grocery anchor tenant, low occupancy rates and below market rents. The Sponsor’s business plan was to acquire the asset with a fitness tenant anchor in tow and then reposition and stabilize the remainder of the center.
Sized to 80% of total project cost, the loan includes a future funding facility to cover tenant improvements, leasing commissions and capital expenditures. The rate floats at 1 Month LIBOR plus 4.25% (approximately 6.75% today) and carries a two year term with two one year extension options. Interest is not charged on the holdback until funds are drawn. The Lender was able to accommodate several changes to the business plan throughout the application process. This included relocating several existing tenants within the center due to a conflict presented in existing tenant leases.
Rate: Floating at 1 Month LIBOR + 4.25% (6.75% today)
Term: 2 Years with 2 One Year Extensions
Amortization: Interest Only
LTC: 80%
Guarantee: Non-Recourse- Advisors: Evan Kinne
