Gardena

GSP arranged the non-recourse, cash-out loan on a 165,000 sq. ft. industrial property in Gardena, (Los Angeles) California. The property consists of seven separate adjacent concrete tilt up buildings constructed in the 1970’s, and contains a mix of both warehouse and flex space. Challenge: The Sponsor’s objectives were to secure non-recourse financing with maximum cash-out proceeds at the lowest rate available. A high percentage of month-to-month tenancies and near-term lease expirations complicated the underwriting despite the 100% occupancy. The property condition report dictated significant expenditures on capital improvements. Solution: GSP identified a number of Insurance Company and CMBS lenders that favor industrial properties. They were therefore able to present competing loan proposals for the sponsor’s consideration without the requirement for a repayment guarantee. To address rollover exposure, GSP demonstrated support for the month-to-month tenancies with evidence of strong historical occupancies and excellent market fundamentals. GSP was able to negotiate a lower reserve and holdback, as well as an ability to release a portion of the holdback at closing to purchase required building materials. While in application, GSP worked with the lender to increase proceeds and reduce the interest rate spread to partially offset an increase in the 10-year swap rate.