Transaction Overview
George Smith Partners arranged the acquisition financing for a brand new 78,000 square foot office building in the Platte River sub-market of Downtown Denver. The Sponsor had an executed lease for 65% of the building at closing, with an option to take the remainder of the space. Sized to 65% of total cost, the capitalization consists of a $25,700,000 purchase price and $10,300,000 TI/LCs including carry cost. Floating at LIBOR + 475, the non-recourse loan carries a 3 year term before options.
Challenge: Per the purchase contract, the newly constructed office building would be delivered as a warm shell, with an extensive TI build-out ($130/SF) still to be completed. With 14 months of no cash-flow and the TI build-out to be completed for a startup tenant, the financial market struggled to underwrite the business plan.
Solution: GSP documented the tenants’ impressive capitalization and national expansion plan. The Denver Office Market is prime for this tenants’ business model and the sub-market strength added to our underwriters’ comfort level.
