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$9,542,000 Take-Out Refinance of Owner-User, Flex Creative Office & Warehouse; Los Angeles, CA

Rate: 3.625% Fixed
Term: 3 Years
LTV: 65%
Prepayment: None
Guaranty: Full Recourse

Transaction Description:

George Smith Partners successfully arranged a take-out loan of $9,542,000 for a recently renovated, two-story, flex property just south of downtown Los Angeles. The total collateral consists of a 40,417 SF building and three separate surface parking lots totaling 86 spaces. The Sponsor, a repeat client, acquired the Property two years ago as part of a three-property portfolio that GSP arranged the financing for. Those proceeds were used to complete an adaptive reuse of this former industrial building into creative office and warehouse. The Sponsor moved its headquarters to this location and occupies over half of the space. The remaining units for lease attract tenants priced out of the more expensive downtown LA and Culver City areas.

There were significant challenges during the construction period, including a total loss fire on one of the properties within the acquired portfolio, the impact of COVID-19 on the Sponsor’s businesses and a maturing loan with the acquisition lender. GSP leveraged its strong relationships and financing expertise to work out extension and repayment solutions with the existing lender while identifying a new capital source to provide favorable terms for owner-user financing. The loan amount turned out to be well above the acquisition price and renovation costs.

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