Transaction Overview
GSP successfully secured a regional bank to refinance a 94% occupied, 102,000 square foot industrial center located in a tertiary section of San Bernardino County. The ten year term is fixed for five years at 4.75% before floating over LIBOR plus 285 basis points. There is no pre-payment penalty. The loan was constrained by a 1.25 DCR and 75% LTV.
Challenge: Many national lenders are not familiar with the High Desert and shun this market due to the available raw land for future development. Due to a lack of industrial sales in this market, there was concern as to the appraised value for the subject. The sponsor also required a flexible prepay as a sale of the property within the next few years is a possibility.
Solution: GSP targeted local lenders familiar with the region and identified a capital source comfortable with this outlying market. GSP negotiated a favorable interest rate with no prepayment penalty and worked with the appraiser to insure the asset value reflected its high quality and rental demand while not penalized for location.
