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Related Financings
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5 Day Close $3,000,000 Non-Recourse Bridge Loan on Fire Damaged Downtown LA Retail Property
July 12, 2017
Transaction Description
George Smith Partners secured a $3,000,000 non-recourse bridge loan to demolish and begin the redevelopment of a fire damaged retail building on a prime corner in Downtown Los Angeles. After the fire, the sponsor decided to demolish and rezone the property. The long term plan is to redevelop the property into a mixed use building with ground floor retail, office, and condos. GSP used its experience and relationships to identify a private money lender who could understand the greater value of the project and was able to demonstrate both the inherent value of the property due to its extraordinary location as well as the future value of the project as completed. The lender was able to close in 5 days. The interest only loan is priced at 7.99% and represents 55% of the property’s current value. The loan has a 1-year term with a 1-year extension option and no prepayment penalty.Rate: 7.99%
Term: 1 Year with a 1 Year Extension
Amortization: Interest Only
Guaranty: Non-Recourse
Prepayment Penalty: None
LTV: 55% -
$7,000,000 Non-Recourse Acquisition & Reposition for a Tertiary Regional Mall
February 16, 2012
2 – 15 – 12 Transaction Description: Financing closed from start to finish in 10 days. This underperforming retail asset was operating at breakeven cash flow, but carries an incredible potential for redevelopment. Although the Borrower held expressions of interest from numerous potential tenants, no leases were negotiated or executed by funding. The financing allowed the sponsorship to acquire the property from a bank within a compressed timeframe, and included an additional capital funding + interest reserve to support the loan during lease-up through the redevelopment and entitlement process. Challenge: The Borrower committed significant non-refundable deposits to the seller, mandating the certainty of close. This acquisition required a quick close as the new owners’ business plan included multiple reposition/redevelopment scenarios with both demand and entitlement risk. No “warm-body” repayment guarantee was available for the new financing. Solution: GSP relied heavily on its relationship with the Lender and access to the primary decision makers. This produced a loan with a mechanism that incentivized the Sponsor to successfully execute the business plan and compensate the Lender for the perceived market risks. The Lender understood the “story”, and quickly evaluated the in-depth market information provided by the Borrower. The Lender and Sponsor worked in good faith without formalized business terms in order to expedite and close the acquisition by the Seller’s drop-dead date. Sponsorship expertise in this market was crucial in securing the non-recourse debt. Non-recourse Brokers: Gary E. Mozer, J. Jay Brooks -
$2,600,000 Acquisition Loan for 90% vacant 26,000 sf Strip Retail in Henderson, Nevada. Lender funded 7 business days after receiving request from GSP!
March 23, 2011
3 – 23 – 11 Transaction Description: GSP arranged quick close financing for this 2010 constructed retail property. The acquisition price was well below replacement costs. The center consists of 1) 2,600 sf pad leased to a leading fast food tenant for 20 years, 2) A vacant 15,000 sf retail building with leases in negotiation for 11,500 sf, and 3) Two pads totaling 9,900 sf. Both pads are vacant but have LOIs being circulated from other fast food tenants. Las Vegas retail vacancy exceeds 20% although the lender understood this assets’ prime location and leasing potential. The lender also funded an interest reserve to cover the below break-even debt coverage. Rate: 12.5% Amort: Interest Only paid through a lender funded reserve account LTC: 67% Lender Fee: 4.5% Broker: Steve Bram
