$9,450,000 Acquisition Bridge Financing for Vacant Special Use Building; Two Week Funding @ 95% of Purchase

Transaction Description: George Smith Partners successfully placed the acquisition debt of a 68,000 square foot vacant special use building in downtown Portland, Oregon. The business plan calls for a conversion from its current special purpose configuration to a single tenant campus facility. A fifteen year credit tenant lease was executed for the entire space just prior to the close of escrow. The non-recourse loan was sized to 95% of the acquisition price and funded in two weeks from termsheet execution. Fixed at 10% for 6 months, the loan carries an interest reserve for the non-cash flowing asset.

Challenge: Tenant lease negotiations lagged and conventional debt was unable to facilitate the acquisition on the vacant building above 50% LTC. With two weeks until contract expiration, certainty of execution as applied for was mandatory at a very high leverage based on the assumption that the lease would be signed.

Solution: GSP identified a lender who could respond quickly and agreed to process to commitment based on the probability that the lease would be executed prior to funding. The value of the executed lease would provide for conventional construction financing and the take-out for this high-leveraged acquisition bridge loan. The lease was vetted by all parties and signed just prior to funding and the termination of the purchase and sale contract, two weeks from termsheet execution. The six month term will allow ample time for the sponsor to obtain institutional construction financing.