California

GSP arranged the refinance on a 2005 constructed, 59,000 square foot retail center in the San Fernando Valley area of Los Angeles, California. The Borrower was cash flow driven and GSP secured an Interest Only 10-Year fixed term to maximize monthly proceeds after debt service. Challenge_:_ Despite the relatively new construction and the 97% occupancy at the property, rental rates in the San Fernando Valley had experienced an overall decline over the past three years. The majority of the subjects’ leases will roll during the new loan term, predominantly in the next three years. The lease-roll added a perception that gross rental income could slide upon tenant renewal, adversely impacting the net income. Solution_:_  GSP demonstrated that sales for national tenants at this location were particularly strong, and the overall cost of occupancy was below market. GSP identified a lender that understood the metrics of these specific tenants and how they differentiated themselves from other retailers in the local market. The Lender issued an application for 60% leverage and 10 Years of Interest Only. The property appraised value netted a 53% LTV allowing the Borrower to maximize cash flow over the next ten years.