$9,700,000 Non-Recourse Mix-Use Anchorage “Oil Patch” Refinance

Transaction Description: George Smith Partners successfully arranged a $9,700,000 permanent loan for a three-tenant, 111,000 square foot mixed use retail & back office/warehouse property located in Anchorage, Alaska. The well-maintained asset is of high quality construction and has a strong historical cash flow that is supported by its’ sold occupancy history. Fixed for 10 years at 4.3%, the non-recourse loan amortizes over 30 years.

Challenges: Market concerns as an “oil patch” added additional scrutiny by lenders fearing a dependency on oil production. Appraisal comparibles were difficult to obtain due to the lack of comparable properties trading. Local brokers and owners are reluctant to share lease rates in determining value and event risk. Capital market volatility made the all-in coupon difficult to predict.

Solution: GSP was able to educate the lender on the diversity of the economy and demonstrated the subjects’ position in the market insulating the cash flow from potential economic disruptions. Mr. Brooks also called on his relationships within the community to obtain lease and sale compatibles to assist with the appraisal process. The low loan to value allowed the lender to approve the loan as applied for despite secondary market fluctuations.