Rate: L + 925 w/ 0.50% Libor floor
Term: 18 months
LTC: 75%
Prepayment Penalty: 12 months min. interest
Guaranty: Non-Recourse
Transaction Description:
George Smith Partners successfully advised on a $8,700,000 construction financing for the development of a 5-story, 23,654 square feet office building located in Denver, CO. The Sponsor’s combined 30-year real estate development experience in conjunction with their partner’s 40+ years of commercial leasing experience was key to securing the financing. GSP worked through several strategies with the Sponsor to source the right non-recourse financing terms for the ground-up ‘spec’ office transaction. Ultimately, GSP successfully obtained several highly reliable financing options, and the Sponsor selected a lender with exceptional terms.
The Sponsor projects a timely delivery for completion of the project in late 2022 and intends to market the lease of the building during design and construction. With the robust economic recovery from the COVID-19 pandemic, the greater Denver metropolitan area is experiencing rapid job growth and expansion, increasing the demand for office spaces.
Advisors
-
Evan Kinne
Managing Director, GSP; CEO, AXCS Capital
-
Ed Steffelin
Managing Director, GSP; President, AXCS Investments
-
Jordan Lipton
Vice President
Related Financings
-
$56,500,000 Construction Financing for a Coastal Infill Mixed-Use Asset; Solana Beach, CA
May 19, 2021
Transaction Description:
George Smith Partners arranged $56,500,000 in construction financing for the development of a mixed-use coastal infill project in Solana Beach, CA. The mixed-use development features 55,000 square feet of office space, 9,000 square feet of retail and 25 apartment units.
Located just one block from the beach and the Cedros Avenue Design District, the two-story development focused on sustainability will be the largest mixed-use project along Highway 101 in the past three decades. The dearth of comparable projects, especially ones with large office floorplates, presented a unique opportunity.
Amidst a time of market volatility and economic uncertainty, GSP was able to identify capital who not only understood the value of all three components and the subsequent demand but also the ability of the Sponsor to execute on the intended business plan.All Terms Confidential
-
$52,285,850 Senior Construction & Mezzanine Development Financing w/Performance Bonds
June 19, 2013
6 – 12 – 13 Transaction Description: George Smith Partners placed the $52,285,850 Senior Construction & Mezzanine Development Financing w/Performance Bonds for Phase I of a 310 acre master development project in Upper Marlboro, Prince George County, Maryland. Upon completion, the build out will encompass 533,000 sf of retail, 845 “for sale” SFRs & town homes, 2,240,000 sf.of office, 600 key hotels (multiple flags) and 884 multifamily rental units. The financing provided was for Phase I of the development, which consists of the entire infrastructure to deliver 500,000 sf of retail, 348 town homes, 504 rental units and a 150-key hotel. The raw land was initially purchased in February 2012 for $23,700,000. Challenge: The foreign based international development company has been extremely active in acquiring land in the United States during the past 5 years from their Canadian HQ. Collectively, they have acquired over 50,000+ acres in Arizona, Texas, Georgia, North Carolina, DC Region and Southern California. While they have been active in developing their land holdings in Canada since 1979, this was their first large financing request in the U.S. (The company owns all of their land un-levered). To add further complexity, the ownership structure in this asset included a Canadian Public Company and a German entity, which owned the asset as a TIC Structure. This precluded the sponsor from using a pledge of membership interest for the mezzanine financing. Sponsorship also had an important deadline to start the development. Negotiating the inter-creditor was paramount in a successful closing of the capital stack between the senior & mezzanine lenders. Prince George County has some of the most difficult performance bonding requirements in the country. Solution: GSP immediately embarked on a strategic and national in scope process of marketing that included face-to-face meetings in Boston, New York, Maryland, Virginia, DC, Texas, Arizona & California. The project included many moving parts involving articulating the strengths in multiple disciplines; valuation in retail, single family, hospitality, multifamily rentals, office & residual tract land. Combining this articulation and blanketing the country, GSP was able to secure senior debt from a Texas based bank that understood land development and was excited about the prospects for future development opportunities with this sponsor. GSP then structured the mezzanine loan from a New York based hedge fund making its first investment in commercial real estate. By focusing on market education in structuring and collateral, we were able to successfully complete a complicated inter-creditor agreement and funding by the mezzanine loan. Securing the mezzanine loan as a 2nd trust deed, we were able to provide the mezzanine lender it’s security, rather than by the standard pledge of membership interest. By adding a portion of the bonding capacity from the lender, the Sponsor was able to reduce the overall costs to secure the performance bonds for the project. The Grand Opening of the project is Thursday, June 13th. Rate: 7.58% Blended Term: 3 Years w/two – 1 Year Exts LTC: 66.7% Recourse: 50% recourse limited to a corporate entity. Advisors: Malcolm Davies, Peter Kleinberg, Drew Sandler.
For more information, please visit www.WestphaliaTownCenter.com
