Transaction Overview
GSP successfully placed the cash-out refinance of a 110,000 square foot grocery-anchored retail center in northern Orange County. This loan represented a significant return of equity to the Borrower on a non-recourse basis. The 10 year term is fixed at 4.27%, amortized over 30 years.
Challenge: The anchor tenant representing 43% of the gross income and 40% of the net rentable square footage has yet to take occupancy, with “doors open” 45 days past our funding date. The tenant’s corporate outlook is negative.
Solution: GSP structured a holdback whereby funds at closing were sufficient to pay off the existing loan and offer a small return of equity. The remaining proceeds were held and will be released when the anchor issues a clean estoppel and begins paying rent. Market data on demand generators, qualitative analysis on the tenant’s commitment to the space, and information on potential replacement tenants supported the certainty of the future income stream.
