California

GSP placed the cash-out refinance of a specialty retail center located on the south shore of Lake Tahoe, California. The 18,000 square foot property was acquired in 2002 and includes 300 feet of lake frontage, a man-made harbor and a 300 foot pier. The 10 Year loan is non-recourse and priced at 5.89%, amortized over 30 Years. Proceeds were tied to a 9.5% debt yield on this special use asset. Challenge: Beyond the challenges associated with the inherent seasonality of the property’s performance and the high loan psf ($562/sf), the State Land Commission’s permit, authorizing the property’s access to the water was cancelable upon change in ownership; an impossibility for any lender. Several of the center’s largest water oriented tenants lacked the proper insurance coverage required by most lenders. Solution:GSP promoted the property’s strong operating history and the rarity of having 300 square feet of lake frontage near a downtown corridor. These factors contributed to the lenders comfort with both the seasonality and the high loan psf. GSP worked with the lender and the borrower’s legal counsel to restructure the state permit with the California State Lands Commission. GSP negotiated with both the borrower’s and lender’s insurance consultants to resolve coverage issues.