Rate: 7.82%
Term: 12 Months
Amortization: Interest Only
Fees: 1.25 points
Recourse: Carve-Outs
Prepayment: None

George Smith Partners placed a $10,000,000 cash-out refinance of a 100% owner/user corporate office and assemblage facility in Orange County, California. Excess proceeds were used to address a loan maturity for other unrelated real estate. Those other assets are un-stabilized but located in primary in-fill Los Angeles markets. Although proceeds were allocated to other real assets our Capital Provider only collateralized the subject Property. Their exit will occur post-reposition of the other assets and the portfolio will be recapitalized with traditional institutional debt. An MAI was not required; thus the loan was sized to 60% of estimated value. Fixed at 7.82% for 12 months, this non-recourse bridge loan does not carry a pre-payment penalty. Closing was executed within 10 days of solicitation of this loan request.

Advisors

Matthew Kirisits Director

Rate: 7.50% Fixed
Term: 1+1
Amortization: Interest-Only
Payment Penalty: 4 Months Minimum Yield Maintenance
DSCR: 0.70:1.0
Guaranty: Non-Recourse

Transaction Description:

George Smith Partners secured a $9,400,000 non-recourse, cash-out, bridge refinance of a 208,000 square foot 9-level 414-parking stall garage located in Downtown Los Angeles. The Building has a historic designation and will be converted to a mixed-use project that will include creative office over parking and ground floor retail. The 12-month bridge loan is interest-only fixed at 7.50% with only four months of required yield maintenance. The debt coverage is less than 1.0 with interim cash flow while the adaptive-reuse business plan is finalized. The loan includes a holdback for interest carry shortfall and provided the Borrower cash-out proceeds of $300,000.

Challenges/Solution:

The Property was encumbered by a $12,800,000 loan of which ~$4,000,000 had been force-funded resulting in a heavy carry burden. GSP was able to negotiate a loan exit at a reduced cost (reduced exit fee and waiver of unused fees) while providing for cash out proceeds. GSP identified a capital source that understood the as-is value of the asset, the redevelopment potential, location and strength of the Sponsor (Developer). Based on these strengths, the Lender was able to underwrite in-place income while providing cash-out proceeds and significantly reducing the carrying cost of the Project while providing the necessary term (with extension) needed to complete and finalize an adaptive reuse plan.

Rate: 4.98%
Term: 10 years
Amortization: Interest Only
Guaranty: Non-Recourse
Lender Fee: Par

Transaction Description:

George Smith Partners arranged $2,830,000 of acquisition financing for the purchase of a 17,000-SF industrial-flex property in El Segundo, CA. The Sponsor was awarded the deal in an off-market transaction with a hard-close date to facilitate a series of 1031 exchanges for the Seller. GSP utilized its extensive lender relationships to identify a long-term, fixed-rate, non-recourse lender that would work diligently to close in accord with the required timing.

The Property is 100% NNN leased to a credit-tenant on a recently signed 10-year lease. Situated in a business-friendly district of El Segundo, the Property has excellent adaptive reuse potential. The interest-only acquisition financing is fixed at 4.98% for 10 years.

Advisors

Gary M. Tenzer Managing Director & Principal / GSP Co-Founder