$9,400,000 Non-Recourse Cash-Out Bridge Financing in Downtown Los Angeles, CA

Rate: 7.50% Fixed
Term: 1+1
Amortization: Interest-Only
Payment Penalty: 4 Months Minimum Yield Maintenance
DSCR: 0.70:1.0
Guaranty: Non-Recourse

Transaction Description:

George Smith Partners secured a $9,400,000 non-recourse, cash-out, bridge refinance of a 208,000 square foot 9-level 414-parking stall garage located in Downtown Los Angeles. The Building has a historic designation and will be converted to a mixed-use project that will include creative office over parking and ground floor retail. The 12-month bridge loan is interest-only fixed at 7.50% with only four months of required yield maintenance. The debt coverage is less than 1.0 with interim cash flow while the adaptive-reuse business plan is finalized. The loan includes a holdback for interest carry shortfall and provided the Borrower cash-out proceeds of $300,000.

Challenges/Solution:

The Property was encumbered by a $12,800,000 loan of which ~$4,000,000 had been force-funded resulting in a heavy carry burden. GSP was able to negotiate a loan exit at a reduced cost (reduced exit fee and waiver of unused fees) while providing for cash out proceeds. GSP identified a capital source that understood the as-is value of the asset, the redevelopment potential, location and strength of the Sponsor (Developer). Based on these strengths, the Lender was able to underwrite in-place income while providing cash-out proceeds and significantly reducing the carrying cost of the Project while providing the necessary term (with extension) needed to complete and finalize an adaptive reuse plan.

Advisors

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