Transaction Overview
GSP successfully placed a $32,100,000 non-recourse acquisition loan on a 285,775 square foot retail center in Riverside County: anchored in part by a discount movie theater and fitness center. Sized to 75% of purchase and an 8% debt yield, the five year term allows for three years of interest only before amortizing over 30 years. Fixed at 4.47%, the yield maintenance prepayment penalty opens the last five months of the term.
Challenge: The Sponsor requested maximum leverage yet minimal debt service payments to meet cash-on-cash return hurdles.
Solution: GSP identified a lender willing to provide a five year fixed rate term with three years of interest only payments, significantly increasing Sponsor’s cash flow after debt service and allowing him to realize his cash-on-cash requirements.
