Trophy Gas Station; 3.1% Interest Rate for 10 Years; Orange County, CA

George Smith Partners secured $5,000,000 of senior financing for a gas station located at a premier Orange County intersection. The loan is fixed at 3.10% for the entirety of the 10-year term. This is one of the lowest fixed rate financings ever placed by GSP even though gas stations are typically priced with an interest rate premium.

The asset class presented a unique challenge when marketing the Project. GSP was able to arrange the loan with a money center bank by highlighting the strong cash flow, extensive experience in management and operations, and irreplaceable site location. The Lender did not require a depository relationship from the Sponsor, even though she was not an existing client.

The Sponsor showed concerns about having a large loan balance towards the end of the loan term, believing that the continuing growth of electric vehicles could diminish the value of gas stations in the future. GSP negotiated to allow the Sponsor to pay down up to 15% of the outstanding loan balance every year. The amortization was also reduced to 20 years to accelerate the principal paydown.