Transaction Overview
George Smith Partners successfully placed the acquisition financing of a 4,570 square foot office/warehouse in Torrance, California. The Borrower was leasing an adjacent property but required more space. The purchaser took advantage of this program to relocate to space that would accommodate the company’s growth and provide for the transition from tenant to owner. Fixed for 7 years at a sub-5.0% coupon, the 90% of purchase price loan has a 20 year call date.
Challenge: This area of Los Angeles’ South Bay is plagued with environmental contamination. Although specific environmental reports indicated there was no environmental exposure to the subject property, the phase one report was initially rejected. The seller required closing to occur on a date certain leaving a limited window of time to complete the transaction. A low appraisal put loan proceeds at risk of being reduced due to an LTV constraint.
Solution: GSP identified a capital provider that had completed similar loan requests in the business park and worked diligently with the lender to provide the information necessary for the environmental report to be accepted. The lenders’ knowledge of the market allowed us to further expedite the process and meet the sellers’ timeline. The LTV constraint was modified to compensate for the appraisal and thus maintain the original loan amount.
