Transaction Overview
GSP successfully arranged $28,000,000 in non-recourse debt to recapitalize a shadow-anchored regional center in a secondary market. The 73% LTV financing consisted of two loans; 1) $24,000,000 5-year loan fixed at 4.32%, amortized over 30 years for the in-line parcels, and 2) $4,000,000 portfolio loan floating over 30-Day Libor + 3.00% with no floor; collateralized by out-parcels and pads. These loans were structured to allow for the prepayment of the floating rate debt and liquidation of out-parcels.
Challenge: The property suffered from significant decreased cash flow during the economic downturn due to its location in a secondary market and a weak frontage on major thoroughfares. The sponsor required a non-recourse structure while securing maximum proceeds but the flexibility to sell off parcels in accordance with their business plan.
Solution: GSP identified a securitized lender who will also utilize their balance sheet for an on-book execution. The portfolio transaction does not require a pre-payment penalty, allowing the flexibility to sell parcels. Both loans were originated by the same originator, allowing one underwriter to review both transactions.
