Transaction Overview
George Smith Partners successfully arranged a $22,600,000 Fixed Rate Loan for the Refinance of a 220,000 SF, 1960s vintage industrial property. It's well located in a low vacancy industrial core submarket at a freeway convergence with direct access to all major Southern California markets. The property is occupied by two long time tenants for over 25 years. Each tenant has renewed multiple times and are paying below market rent. One of the tenants has invested over $20,000,000 in improvements to their space. The building sits on a 12-acre site and features 14' and 24' clear heights, 15 ground level loading doors, 6 dock high doors, and over 500 parking spaces. The building was renovated in 2001 to accommodate the present tenants. One of the tenants has about 40,000 SF of office that is being partially utilized at present. The lender and B piece buyers were able to get comfortable with the office situation as its about 20% of the total square footage, rent is below market and the space utilization has fluctuated over the years.
Challenge: The tenants have lease terms expiring during the loan term. Solution: The loan was structured with a leasing reserve funded at loan closing, along with favorable property attributes: a favored property type (industrial), below-market leases, and a low-vacancy submarket with high demand.
