Rate: 4.57% fixed
Term: 10 years
Amortization: 25 years
Loan to Cost: 91.1%
Lender Origination Fee: None
George Smith Partners arranged $8,740,000 of acquisition financing for an owner user retail property in Los Angeles. The Sponsor had been introduced to GSP after they received a loan cancellation from their direct bank. GSP jumped into the loan process right away and worked with the Sponsor, their CDC and the new Lender in order to ensure closing in a timely matter. The selected Lender that GSP brought in was able to give the Sponsor a much more aggressive interest rate than their direct lender had promised in their LOI. This ended up saving the Sponsor 67 bps on the interest rate and over $240,000 in interest during the first 10 years of the loan.
$14,050,000 Acquisition and Reposition Financing, 89% LTC (4.90% blended coupon) on a 79-Unit, Mixed-Use Apartment and Retail Project; St. Louis City, Missouri
December 2, 2020
George Smith Partners successfully placed $14,050,000 in construction financing, which funded 89% of total project cost, for the acquisition and reposition of a 79-unit, mixed-use property in a desirable and historic St. Louis City neighborhood. GSP was engaged by the Borrower when its original lender, a national REIT, was forced to re-trade the Borrower on loan terms due to the COVID-19 pandemic. Upon being engaged, GSP was able to source the replacement debt and equity in time to close the transaction without a material delay. The financing structure included a senior loan to 81% loan-to-cost and a preferred equity investment with last-dollar exposure to 89% of total project cost with a 4.90% blended cost of capital. GSP leveraged its expertise of the St. Louis market, long-standing lender relationships, and capital markets creativity to achieve the Borrower’s goals of minimizing cash equity invested into the Project so that it can keep a substantial cash reserve to pursue additional projects which are expected to present themselves during the COVID-19 pandemic.
Term: 36-months with one, 12-month extension option
Amortization: 24-months interest only, 25-year amortization thereafter
Guaranty: Full repayment guarantee (on senior loan only; does not apply to the non-recourse preferred equity investment)
Lender Fee: 50bps
April 1, 2020
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.
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.
August 7, 2019
George Smith Partners arranged a $19,900,000 CMBS acquisition loan for the purchase of the Burbank Collection, a 39,000SF retail condominium located in Burbank, CA. The Burbank Collection houses well-known food concepts such as Yard House, Panera Bread, Pinkberry, and Boiling Crab along with Barney’s Beanery and Steak ‘N Shake. The Class-A ground floor retail space underlies 118 residential condominium units, is situated on a pedestrian promenade and is shadow-anchored by the AMC Burbank 16 movie theater, one of the highest grossing AMC theaters in the country.
GSP’s extensive lender relationships allowed for the marketing of this financing to many different banks and life insurance companies as well as CMBS lenders. The most challenging hurdle at the outset with each lender was to make them comfortable with the condominium structure. Prior to the signing of the lender’s loan application, GSP requested that the Lender’s legal counsel engage in a full review of condominium documents to ensure that the Lender would be comfortable with the intricacies of condominium ownership.
After the loan was in application the 10-Year Treasury and Swap indices dropped approximately 40 bps below the rate floor set in the loan application. GSP’s long-term relationship and track record with the Lender gave GSP the negotiating leverage to convince themto drop the rate floor. This effectively split the benefit of the rate decrease with our Sponsor.
GSP obtained maximum proceeds as the loan was sized to 76.5% of purchase price and 75% of value. The all-in interest rate was priced at 157 bps over 10 Yr Swaps and includes three years of interest-only payments.
LTPP (Loan-to-Purchase Price): 76.5%
Term: 10 Years
Amortization: 30 Years
Interest-Only: 3 Years
Lender Fee: Par
Open Prepayment: Last 6 Months
- Advisors: Gary M. Tenzer
$14,950,000 Non-Recourse Financing for the Acquisition of a 17-Property Single Tenant Dollar General Portfolio
June 5, 2019
GSP successfully placed $14,950,000 of non-recourse, 14-year (with an anticipated repayment date ten years from the initial closing) fixed-rate debt for the acquisition of 17 newly-constructed freestanding retail buildings 100% leased to Dollar General. The individual assets have 15-year lease terms and are located primarily in tertiary Upper Midwest states. GSP executed the financing concurrent with construction completion and sourced a lender able to provide 75% leverage financing at a 4.52% blended fixed coupon with five years of Interest Only payments, despite an absence of sales history and concurrent tenant lease terms expiring one year after loan maturity. The loan structure also provides the Sponsor flexibility to release properties from the loan collateral in the event of sale after year three of the loan term and allows the Sponsor to release up to 30% of the individual assets from the mortgage collateral and substitute like kind properties through year nine of the term.
$12,790,000 Non-Recourse Acquisition Bridge Financing to Reposition a 120,000 Square Foot Retail Center in Phoenix, Arizona
January 30, 2019
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.