$124,250,000 Retail Construction Loan

George Smith Partners secured a $124,250,000 permanent loan to refinance out an existing construction loan on a 560,000 square foot, class-A, mixed-use office and retail property in a Midwest market. The non-recourse loan provided the borrower significant cash out at close in addition to funding 100% of future tenant improvement and leasing commission costs associated with stabilizing the property. It also repaid the existing construction loan and covered closing costs. The existing property is 93% leased, but only 80% occupied, to a mix of credit and non-credit tenants including a boutique cinema. The five-year, floating-rate loan priced at 2.35% over One-Month LIBOR and offered four years of interest only payments with 35-year amortization during the fifth year of the loan term. Other benefits of this loan structure include: • flexible prepayment • five-year initial term vs. typical 3+1+1 loan term structures that would have required specific performance hurdles and extension fees • no forced funding date for the future funding component • no syndication risk as the portfolio lender (a bank) is holding the entire loan on balance sheet • generous interest rate hedging requirement of purchasing LIBOR caps for two-year terms to reduce hedging costs