Rate: One-Month LIBOR + 5.50%
Term: Two years plus two one-year extension options
Loan to Value: 80% (121% of Purchase Price / New Basis is 140% of Purchase Price)
Amortization: Interest only during the loan term
Guarantee: Non-recourse
Lender Fee: 1.00%
Prepayment: 1% for first 12 months; Open thereafter. Waived if lender does take-out.

Transaction Description:

George Smith Partners secured $43,500,000 in bridge financing collateralized by a 95% vacant, 2.2MM square foot industrial building in a secondary Midwestern market. The building was constructed through the 1950s and 1960s by a major retailer and used for many years as a major distribution center. As internet retail ate into the tenant’s business, the building slowly lost its business importance to the prior owner. The Borrower, a well known owner and operator in the area bought the Property off market unoccupied approximately one year ago and has been improving the property and been in leasing talks with an array of strong tenants. The lease that occupies 5% of the building is attributed to a third party logistics subsidiary of the Borrower.

Sized to 80% of stabilized value, proceeds from the bridge loan take out the Borrower’s original acquisition loan and bought out an institutional Preferred Equity investor. The Borrower now owns the property free of all third-party equity investors. Additional loan proceeds will also be used to cover closing costs and fund future work, including CapEx and leasing costs associated with repositioning the 60-year-old building. The financing secured by GSP not only allowed the Borrower to recap out their equity partner and claim exclusive ownership rights to the asset, but also gave them the final renovation dollars required to attract new tenants and eventually bring to Property to stabilization.

Advisors

Evan Kinne Managing Director, GSP; CEO, AXCS Capital

Rate: 8.80% Fixed (Blended)
Term: 12 Months
Amortization: Interest Only
Lender Fee: 1.33% (Blended)
Prepayment: Open Full Term
Guarantee: Non-Recourse (First), Recourse (Second)

Transaction Description:

GSP arranged $5,475,000 in financing, composed of $4,275,000 non-recourse first mortgage from a REIT and $1,200,000 recourse second mortgage from a private-money lender, to acquire a 1980’s-vintage, 100% vacant data center. The 77% of purchase price financing provides 12 months of term to allow the Sponsor to 1) implement capital improvements, and 2) generate positive cash flow, prior to putting permanent financing on the Property. The Lenders did not require an appraisal or other third-party reports, and required only a four-month interest/carry reserve despite no in-place cash flow. The financing is prepayable without penalty throughout the loan term.

Rate: 4.48%
Term: Fixed for 5 years
Prepayment Penalty: 5,4,3,2,1
Guaranty: Non-Recourse

Transaction Description:

George Smith Partners arranged $4,000,000 of non-recourse and cash-out on a refinance of an office building in Beverly Hills. The non-recourse loan is fixed for the first 5 years at 4.48%. There is no requirement for a reserve account which is typically required for tenant improvements and leasing commissions when there are rollover leases in place. The Capital Provider was able to give the Sponsor credit for actual expenses, instead of historical P&Ls. The most recent P&Ls included many capital expenditures and non-recurring expenses, as the Sponsor has spent a great deal of funds in renovating and re-leasing a large portion of units