Transaction Overview
George Smith Partners placed the refinance of a two-tenant flex-office building in the central business district of Santa Barbara. Currently 100% leased and occupied, there is a 100% roll within the next 20 months. Our Sponsor reduced his current coupon by over 50 bpts and locked in today’s historically low interest rates for five years rather than facing interest rate risk in two years when his current loan would have matured. Our Sponsor also benefited from a nominal return of equity. Despite the tenant roll, there are no holdbacks, reserves, escrows, or impounds. The interest rate was locked at application without the requirement of a deposit. Sized to 65% of appraised value, the ten-year term is fixed for five years before a fixed rate reset for the remaining five-year term. Amortized over 30 years, prepayment steps down from 3% and is open the remaining two years of each five-year term. All prepayment penalties are waived in the event of a sale.
