Term: 10 years
Amortization: Interest Only
Lender Fee: Par
George Smith Partners arranged $2,830,000 of acquisition financing for the purchase of a 17,000-SF industrial-flex property in El Segundo, CA. The Sponsor was awarded the deal in an off-market transaction with a hard-close date to facilitate a series of 1031 exchanges for the Seller. GSP utilized its extensive lender relationships to identify a long-term, fixed-rate, non-recourse lender that would work diligently to close in accord with the required timing.
The Property is 100% NNN leased to a credit-tenant on a recently signed 10-year lease. Situated in a business-friendly district of El Segundo, the Property has excellent adaptive reuse potential. The interest-only acquisition financing is fixed at 4.98% for 10 years.
July 11, 2018
George Smith Partners secured $2,849,250 in acquisition financing for a single-tenant Tractor Supply Company in Las Vegas, New Mexico. The Sponsor purchased the 19,000 square foot building for $3,800,000 at a very attractive cap rate for the product type. The tenant has 10 years remaining on their original lease with 10% rental increases every 5 years. GSP was able to mitigate the risk that the market presented by highlighting the Sponsor’s track record with similar assets. Sized to 75% of purchase price, the permanent loan is fixed for 7 years then floats for the last 3 years of the 10-year term.
January 3, 2018
George Smith Partners secured a $3,800,000 permanent loan for the acquisition of a single tenant Tractor Supply Company located in Colorado. The 22,300 square foot building was constructed earlier this year and the tenant has a new 15-year lease. GSP was able to identify a capital source that does not require a reserve structure, which helped to increase the cash flow and bolster loan proceeds. Sized to 73.5% of purchase, the recourse loan carries a 4.84% fixed rate for a 10-year term and amortizes over 30 years. The transaction funded 45 days from application.
June 21, 2017
George Smith Partners arranged the acquisition financing for a single tenant office located in the downtown area of a top Southern California market. The tenant is a private technology company that has 2 years remaining on their lease term. Due to the short lease term, GSP structured in reserves for tenant improvements, leasing commissions, and interest payments in the event that the tenant decides to vacate. If the tenant signs a new lease, the reserves that were held back will be released to the Sponsor. The lender was able to get comfortable with funding the reserves since the tenant is currently paying below-market rents and the property should see an increase in value with higher implemented rents at lease expiration. The financing has a 3-year term and carries a 5-year extension option that can be executed once the tenancy has been finalized and certain financial metrics have been realized. The recourse loan has an initial funding of $8,990,000 and is sized to 70% of total cost, floating at a rate of 2.75% over the one month LIBOR. The additional future funding for re-tenanting the building is not charged interest until drawn.
March 22, 2017
George Smith Partners arranged $5,000,000 for the acquisition of a newly constructed, 17,200 square foot single tenant build-to-suit Rite Aid. Our Sponsor was focused on minimizing monthly debt service costs plus maintaining prepayment flexibility. The proposed Rite Aid acquisition by Walgreens and the tertiary market location added levels of complexity to the transaction. After evaluating the firm’s extensive lending relationships, GSP sourced a regional lender experienced with this location and comfortable with Sponsor’s financial strength, track record, and personal guarantee. The loan is fixed at 4.75% for five years with a 30-year amortization schedule, sized to a 1.20x DSCR, and is open to prepayment at any time. The lender charged a nominal fixed $2,500 cost for loan processing and documentation.
Rate: 4.75% fixed
Term: 5 years
Amortization: 30 years
Prepayment Penalty: None
Lender Fee: 0.50%
March 8, 2017
George Smith Partners secured $1,420,000 in acquisition financing for a single tenant building in Atwater, California. The tenant is a national bank with a strong credit rating and has seven years remaining on the lease with extension options available. The Sponsor wanted to put long term fixed-rate financing on the property. GSP was able to identify a capital source that would provide a 10-year term, even though the tenant rolls within that period. The interest rate is fixed at 4.375% for the first 6 years of the loan. The rate then resets and is fixed again for the last 4 years, with a maximum increase of 50 basis points above the original rate (4.875%). This ensures that the Sponsor has a fixed rate throughout the entirety of the 10-year term, and eliminates interest rate risk. Loan proceeds were constrained by a 1.25x DSCR on a 25 year amortization.
May 18, 2016
Transaction Description: George Smith Partners secured a $22,000,000 non-recourse acquisition loan for the purchase of the world-famous Fred Segal Building in West Hollywood, California. The Sponsor required a capital provider that could provide the highest certainty of execution for this acquisition given a non-US status and lack of American based assets and operating accounts. The small 28,000 square foot improvement calculates to a leveraged $786 per square foot loan on an asset with 84% of the gross rentable square footage rolling over the next three years.
George Smith Partners identified an Lender that understood the unique attributes of the property and did not shy away from the high dollars per square foot despite the lack of credit tenants. The Sponsors are accomplished retailers who understand the dynamic changes taking place in this retail real estate market and the future Flagship possibilities of this location. Floating in the LIBOR “200s”, there is no floor for this three year non-recourse interest only transaction.
Rate: LIBOR+Low 200s
Term: 3 Years + Options
Amortization: Interest Only
Lender Fee: 0.65%
- Advisors: Private: David Rifkind