California

George Smith Partners placed the $4,176,250 bridge loan for the acquisition of a 23,494 square foot retail center in Santa Clarita, California. Although located on a heavy trafficked corner, the Subject was only 70% occupied at close. Sized to 65% of the purchase price, the 7-year loan floats over WSJ Prime + 0.50% with a 4.00% floor. There is no prepayment penalty for this reposition loan. Challenge: Due to the seller’s mismanagement of the property, the asset was 30% vacant at the time of the acquisition; no historical operating financials were provided. All leases roll over the next 2 years with the largest tenant currently month-to-month term. The purchasing entity was setup using a Tenants In Common (TIC) structure. Solution: Our Sponsors’ prior performance and management of distressed retail demonstrated his experience in repositioning distressed retail. Market comparables and operating data provided a supportable budget for underwriting expenses, added support for market strength and mitigate vacancy and short term leases. A personal repayment guarantee off-set the TIC ownership structure concerns.