Transaction Overview
George Smith Partners arranged $27,300,000 in non-recourse construction financing for the development of a 173,193 SF, Class-A, light industrial project in Mesa, AZ. The Project will consist of smaller unit sizes in 10 total buildings ranging in size from 2,500 to 15,000 SF.
Challenges:
This Project was built entirely to spec. Tenants signing smaller leases typically do not pre-lease space before a project breaks ground. Due to supply chain constraints and inflationary pressures, raw materials and labor costs increased significantly. While there have been many large box industrial projects developed in the market, there has been limited development of small bay product and therefore limited comparable lease and sales transactions. Most of the Sponsor team are foreign nationals whose assets lie outside of the United States.
Solution:
GSP successfully obtained several financing options and selected a lender who had flexible execution, a strong understanding of the growing demand for small bay industrial space and was comfortable with rising construction prices. GSP arranged a co-guarantor to subsidize the non-recourse carve-out guarantees.
