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Acquisition Financing for NNN Jack in the Box, Texas

Rate: 5.375%
Term: 5 Years Fixed, 12 Year Term
Amortization: 30 Years
Guarantee: Recourse
Prepayment Penalty: 5,4,3,2,1
Lender Fees: None

Transaction Description:

George Smith Partners placed acquisition perm financing for the purchase of a single tenant, NNN-lease Jack in the Box in Texas. The Sponsor is a single asset entity, whose goal is to self-manage the NNN retail property. This Property was identified in a 1031 exchange. Jack in the Box has 12 years remaining on the lease, therefore George Smith Partners worked with the Lender on structuring a 12-year coterminous term. Due to the low leverage and other mitigating factors, GSP was successful in acquiring a 30-year amortization for the Sponsor along with a stepdown prepayment penalty. GSP also negotiated with the Lender to waive all fees.


Related Financings

  • $3,700,000 Highly Leveraged, Quick Close Acquisition Capital for 97-Unit, Multifamily Property; Oklahoma City, OK

    September 22, 2021

    Transaction Description:

    George Smith Partners secured $3,700,000 for an acquisition of a multifamily property in Oklahoma City, OK. The Sponsor had the opportunity to purchase a well-located, value-add property in Oklahoma City. By utilizing a quick close loan, the Sponsor was able to negotiate a below market price. The Sponsor approached GSP to help arrange a loan that needed to close on a strict timeline of only one week. Because of the quick timing and the short-term distress in the cash flow, the Property would not qualify for bank or agency financing. The Property rents were below market because the Seller self-managed and the Property needs exterior and interior improvements. The loan was structured with a CapEx holdback to allow the Sponsor to implement their value-add strategy. The non-recourse facility represents 75% of total cost and was priced at an interest-only fixed rate of 7.25% with a 12-month term plus two 6-month extension options. The interest-only loan allows for more property cash flow to be used towards improving the Property. Thanks to GSP’s long-standing relationship with this debt fund, we were able to close this transaction in less than 7 days from signing the term sheet.

    Rate: 7.25%
    Amortization: Interest-Only
    Term: 1 Year + Two 6-Month extensions
    LTC: 75%

  • $4,680,000 Paper Lot Land Acquisition Loan in Ten Days; San Diego, CA

    August 18, 2021

    Transaction Description:
    George Smith Partners successfully placed a $4,680,000, 50% LTV loan to fund the acquisition of a 6.9-acre parcel of land located in North County, San Diego, California, and the funds needed to finalize the entitlements for 135 paper lot townhome subdivision.

    When GSP became involved, the Borrower had already invested over $2,300,000 to secure a tentative map and development agreement while the land was under option. However, there were only ten days remaining on the purchase contract when the land lender with whom the Borrower had been dealing with directly, declined to proceed. When the Seller refused to grant the Buyer an extension on the purchase escrow, GSP was engaged to arrange the land acquisition financing to enable a timely closing.

    GSP had several highly reliable alternative land lenders that could close within ten days. Strategically, GSP selected a lender that was not only willing to finance the land acquisition and final entitlements, but also was willing to give the Sponsor a strong indication that they would favorably consider funding the future stages of the project, including the grading, horizontal land, and infrastructure development as well as the vertical construction financing once the final map was achieved in approximately nine months.

    Rate: 10%
    Term: 18 Months
    LTV: 50%
    Guaranty: Non-Recourse with Bad Boy Carveouts
    Fee: 3%

  • 35 Day Close, 70% Acquisition Financing of 4-Unit Multifamily Property; Beverly Grove area of Los Angeles, CA

    August 11, 2021

    Transaction Description:

    George Smith Partners arranged $1,495,000 in permanent financing for the acquisition of a stabilized 4-unit multifamily property located in the Beverly Grove area of Los Angeles, CA. GSP was simultaneously helping the Sponsor close on a few multifamily refinances within their portfolio to pull cash out and use as equity for the acquisition of this Property. Although the occupancy at purchase was 100%, rents were below market because the Seller self-managed the Property and there was a need for exterior and interior improvements. The Sponsor wanted to lock in a low rate to allow for more cash flow to be used towards their value-add strategy. The loan represents 70% of the purchase price and was structured as a floating rate 5-year term, with 12 months interest-only. The interest-only period allows for more property cash flow to be used towards building improvements. The loan has no prepayment penalty, allowing for additional flexibility. Despite being on a strict closing deadline, GSP was able to identify a bank lender who could close within 35 days.

    Rate: Prime + 0.25% w/ floor of 3.50%
    Term: 5 Year, First 12 Months I/O
    LTV: 70%
    DCR: 1.20
    Prepayment: No Prepayment

  • $6,669,200 Acquisition Financing for 76-Unit Multifamily Portfolio, 3.30% For 5 Years,3 Years Interest Only; Portland, OR

    August 11, 2021

    Transaction Description:

    George Smith Partners secured $6,669,200 in proceeds for the acquisition of two properties comprising 76 units in Portland, OR. The loans are fixed at a rate of 3.30% for 5 years, with 3 years of interest-only payments. The loans are non-recourse and have no payment reserves.

    Several challenges were encountered when discussing the transaction with capital providers. Most multifamily loans in Portland are closed through Fannie Mae and Freddie Mac, but these lenders quoted a high rate due to the small size of the market. As a result, GSP had to focus on non-recourse bank lenders, of which there are only a small number active in the market. GSP was able to find a bank with a strong local presence that provided the highest leverage option at a very competitive rate. The pricing was equal to that of multifamily loans in Southern California. The acquisition loan closed in about 60 days.

    Rate: 3.30% fixed for 5 years
    Term: 30 years
    Amortization: 3 years interest-only followed by 30-year amortization
    Prepayment Penalty: 3,1,0
    LTV: 65%
    DCR: 1.20x
    Guaranty: Non-Recourse

  • Non-Recourse Bridge Acquisition Financing for Industrial Building; Gardena, CA

    July 21, 2021

    Transaction Description:

    George Smith Partners successfully arranged a bridge acquisition financing for a single-tenant industrial building in Gardena, CA. The Property is 9,300 SF on an approximate 18,731 SF parcel. The previous owner occupied the space, and the building is now vacant. There was an existing environmental issue that limited the pool of interested capital providers. However, GSP leveraged its market expertise and relationships to identify a lender comfortable with the Property and Sponsor, who is a repeat client. GSP secured a 12-month, non-recourse bridge loan at 7.90% fixed with interest-only payments and no prepayment penalty. This will provide the Sponsor time to resolve the environmental issue, lease the Property and season it for permanent financing. The financing closed within 12 days of term sheet issuance.

    Rate: 7.90% Fixed
    Term: 12 months, with Extension Options
    Amortization: Interest Only
    LTP: 40%
    Prepayment: None
    Guaranty: None

  • $4,500,000 Acquisition and Redevelopment Loan for Senior Living Facility; 30 Day Closing; Chattanooga, TN

    July 14, 2021

    Transaction Description:

    George Smith Partners was engaged to procure a high leverage, non-recourse loan with a 30-day closing timeline for a strategic acquisition of a 144-unit senior living facility in Chattanooga, TN. The Property, which fits in with a larger +$150,000,000 master planned community, presented a unique opportunity for the Borrower to greatly expand points of access and enhance the status of future developments. The chosen Lender understood the value proposition of future development and the Sponsorship’s track record of delivering high quality MPC’s in secondary markets. GSP worked with the Sponsor and Lender to procure a 15-day appraisal and all due diligence within a week of engagement to position the loan to close within 30 days.

    Rate: 6.15% floating
    Term: 30 Months
    Amortization: Interest Only
    Loan to Cost: 75%
    Prepayment: Open
    Recourse: Non-Recourse