California

George Smith Partners successfully placed the $5,816,000 refinance of a 44,498 square foot unanchored multi-tenant strip center in Palmdale, California. The property is well located in an established retail corridor, within close proximity to a recently constructed regional medical center. The 10 year term is fixed at 4.50% for 7 years before rolling to a floater. There is no prepayment during the term of the loan. Challenge:Palmdale has been one of the last markets to recover from the economic downturn. Retail leasing in this market is challenging with average vacancy above 20% for most retail centers. Several lenders quoted 50% loan-to-value or less. The existing loan was coming due and the borrower was unwilling to re-margin the loan. Solution:GSP identified a community bank that had never originated a loan in Palmdale but accepted GSPs analysis of the strength of this location and expertise of the borrower. The Sponsor maintained +90% occupancy at this site since acquisition in 2007. GSP demonstrated the viability of the local sub-market, the competency of the Sponsor and the positive attributes of this asset that contributed to its high occupancy over the last 7 years. A term sheet to 73% of “As-Is” value was negotiated that did not require any additional equity from the borrower.