Rate: 3.85% Blended 1st & 2nd TD
Term: 1st – 10 Years; 2nd – 20 Years
Amortization: 1st – 25 Years; 2nd – 20 Years
LTC: 90%
Guaranty: Recourse
GSP arranged the acquisition loan for a 9,928 square foot office building in Whittier, California for a first time real estate owner. The acquisition allowed our Sponsor to grow her counseling firm rehabilitating injured workers returning to the work force. Prior to engaging GSP, the Borrower sought SBA financing but was declined due to credit issues. GSP identified a bank and CDC (SBA) who invested the time to fully qualify the credit concerns of the borrower prior to issuance of application. The flow of communication and supporting documents led to the approval from both bank and CDC. Sized to 90% of cost the blended Bank 1st Trust Deed and SBA 2nd Trust Deed netted a 3.85% coupon, fixed for 10 years. Amortization is also blended between 25 and 20 years respectively for this recourse loan.
Related Financings
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$5,100,000 Non-Recourse Bridge to Reposition an Industrial Building to Creative Office for a Single, Non-Credit Tenant
June 21, 2017
George Smith Partners arranged $5,100,000 of non-recourse, bridge financing to complete the conversion of a 26,000 square foot, 100% vacant, 1920’s vintage, industrial building into creative office space in a major Southwestern city. The property is well-located near a central business district and is 100% preleased to a single, non-credit-rated tenant. Although not investment-grade, GSP was able to source a Capital Provider comfortable with the tenant’s financial history and business operations. The sponsor acquired the property with cash and proceeds will be used to complete the conversion, taking advantage of the growing creative office market.
Term: 24 Months + Two 12 mo. Extensions
Rate: Confidential
Amortization: Interest Only
LTC: 74%
Guaranty: Non-Recourse- Advisors: Scott Meredith
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$51,000,000 Refinance Single-Tenant Office to 85% of Value & 7.8% Debt Yield
October 15, 2014
Transaction Description: George Smith Partners successfully placed the refinance of a 204,123 square foot Class A single-tenant office building. The tenant is a Fortune 500 company utilizing this space as a regional headquarters. Fixed for 5 years at 5.76%, the $51,000,000 loan is non-recourse; sized to 85% LTV & a 7.8% debt yield. There is no amortization as the loan is interest only for the entire 5 year term. The transaction included a complicated restructure of a former Tenants-In-Common Ownership roll-up into a single purpose entity. This refinance allowed the owners to exit a maturity default and remove themselves from the special servicer.
- Rate: 5.76%
- Term: 5 Years
- Amort: Interest Only
- Non-recourse
- Lender Fee: Par
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$3,120,000 Office Acquisition: 90% of Purchase
October 15, 2014
Transaction Description: Raffi Sarkissian secured the acquisition debt of an owner/user office building that will allow his client to relocate and expand his current operations. The Borrower was working through a technical default issue that precluded him from securing traditional SBA financing and historical cash flow did not support a loan of this size. Mr. Sarkissian identified a bank that underwrote proforma cash flow given the demonstrated increase of purchase orders, and understood the need for the expanded facility to supplement the increase of sales. Fixed at 4.75% for 10 years, the loan provides for a step-down prepayment, open after the 5th year, and was sized to 90% of the contract sale price. Rate: 4.75% Term: 10 Years LTC: 90% Prepayment: 5,4,3,2,1 Open Recourse Advisor:Raffi Sarkissian -
$18,900,000 No Cash Out Refinance of Single Tenant Net Leased Property
December 5, 2013
12 – 4 – 13 Transaction Description: George Smith Partners successfully placed the $18,900,000 rate and term refinance of a 200,000 square foot non-medical administrative building entirely occupied by the University of Wisconsin Medical Foundation. The asset is well located in close proximity to the University of Wisconsin and other facilities supported by the tenant. The property is a four-story office building constructed specifically for the tenant in 2007, comprised of 160,000 square feet of office space and 40,000 square feet of storage, situated on a 10-acre lot. The non-recourse loan is fixed for 8 years at 4.65% before adjusting to then market rates. Challenge: When GSP accepted this assignment, the residual term of the lease was only 7 years for the single tenant user. The shortness of the remaining lease term was unattractive to a majority of lenders in light of the Borrower’s request for a 10-year term. Ownership is structured as a 74 member LLP with no owner holding more than 4% of the shares. Solution: GSP identified a lender experienced in designing loans for single-tenant properties with similar ownership structure. The lease term was amended slightly to add sufficient term for guaranteed rental income during the 10 year term of the loan. Rate: 4.65% Fixed for 8 Years then Floats Term: 10 Years Amort: 20 Years LTV: 70% Prepayment: Yield Maintenance for 8 Years Non-recourse Advisors: Stephen Stein, Teddy Stutz -
$5,800,000 Cash-Out Refinance & Acquisition Loan for a Vacant Building
August 7, 2013
8 – 7 – 13 Transaction Description: GSP successfully arranged the cash out refinance of a 7,300 square foot conventional office building and the simultaneous acquisition loan for a 6,400 square foot adjacent vacant creative office/retail building. No new cash equity was required for either transaction. The cash out loan was limited to 60% of value and is fixed for 3 years at 4.75%, amortized over 25 years. The acquisition loan is fixed for 1 year at 5.25% and is interest only without prepayment penalty. The acquisition loan also included TI and LC’s for the vacant office/retail building. The two loans were funded concurrently and are not cross-collateralized. Challenge: The Client requested 100% of capitalization for the purchase of a vacant retail building including all financing and improvement costs. Solution: GSP arranged for the 50% of total cost on the vacant retail asset inclusive of all reserves and financing fees. All of the cash equity required for the purchase was supplied by the adjacent office building that contains the client’s corporate offices. These two separate loans provided sufficient cash for the purchase of the new building and carry of the existing performing asset. Rate: 4.75% & 5.25% Term: 3 Years & 1 Year Amort: 25 Years & IO LTV: 60% LTC: 50% including all TI reserves DCR: 1.29 & N/A Prepayment: 3,2,1 & none Recourse Lender Fee: 0.875% Advisors: Steve Bram, Jonathan Lee, Shine Cheng -
$12,500,000 Refinance of a Single-Tenant Building w/4 years Remaining
August 2, 2012
8 – 1 – 12 Transaction Description: George Smith Partners placed the refinance of a single tenant office building leased to the County of Los Angeles. The current lease had four years remaining on the term prior to lease-options. The current loan was sweeping most available cash flow to pay down principal. The Borrower requested a term loan that would allow cash flow after debt service. Challenge: The single-tenant nature of the asset and shortness of the remaining term ruled out CMBS and LifeCo term options. The size of the loan request precluded most local and regional banks from reviewing the request. The Borrower had also requested a fixed rate term beyond five years, outside of what most banks will offer. Solution: GSP identified a local portfolio lender who understood this agency’s requirement to be physically located in this market. The agency was well established, having a long history at this location. GSP conducted a broad market search for similar assets and could not identify a similar building within this trade area – providing the lender with comfort that the tenants’ future options were few. The lender concluded the risk of non-renewal was very low. Rate: 5.40% Term: 7 Years Amort: 25 Years LTV: 70% Prepayment: Step-down Recourse Brokers: Marc Schillinger, David Rifkind
