California

George Smith Partners successfully placed the refinance of a discounted payoff (DPO) on a mixed-use, office & retail asset in Claremont, California. The subject property is listed on the Historical Landmark Registry. The new loan financed 97.3% of the total DPO amount on a non-recourse basis for a 3 year term. Challenge: The Sponsor did not have formal approval of the DPO terms from the existing lender until after appraisal receipt, and needed to close within weeks thereafter. While going through the DPO process, one tenant vacated the building. Solution: George Smith Partners worked with the new Lender to secure full approval and commitment prior to the formal DPO agreement. GSP was able to demonstrate that there was significant value in the property beyond what the existing Lender allowed. After the unexpected tenant vacancy, the new capital provider held terms by decreasing reserves and allowing for a lower debt service coverage ratio.