California

GSP successfully placed the refinance of a 46% occupied retail center located in Chula Vista, California. The 94,000 square foot center was slated for residential reposition before the economic downturn. Despite the significant vacancy, the in-place cash flow supports a 1.25 actual debt coverage ratio. The floating rate loan is priced at Prime + 1.5% with a 5.5% floor. Challenge: In 2006, a decision was made to redevelop the property with reduced amount for commercial space and a majority of the lot dedicated to multifamily residential use. Tenant leases were not renewed in preparation for the new use and configuration. The economic downturn in 2008 scuttled the development plans yet a large vacancy had already been created. Solution: GSP identified a lender that understood the property’s story and provided a flexible loan that will allow the sponsor to redevelop a portion of the site while continuing to increase occupancy in the retail component. The in-place cash flow and Sponsor repayment guarantee added credit support and debt service paid current with amortization.