Retail

Shahin Yazdi successfully placed the $5,756,000 cash-out refinance on a 100% leased retail center in South Central Los Angeles. Anchored by an auto repair garage, the property is held as tenants-in-common without the benefit of a single purpose entity. The 10 year term is fixed for seven years at 3.85% before floating, and amortizes over 30 years. Recourse is limited to the top 25% of the loan. There are no holdbacks or reserves to address the potential lease turn. Challenge: This loan request presented a series of challenges including high rollover risk in the first four years, a return of equity, and a non-traditional ownership structure. Solution: GSP mitigated rollover concerns by demonstrating the high historical occupancy and strong location of the property, and that the anchor tenant enjoyed a ground lease at below-market rates. The Lender became very comfortable with the Sponsor’s business plan and use of the net proceeds.