FINfacts™ XXIV – No. 166 | May 8, 2019

MARKET RATES
Prime Rate 5.50
1 Month LIBOR 2.46
6 Month LIBOR 2.61
5 Yr Swap 2.33
10 Yr Swap 2.46
5 Yr US Treasury 2.29
10 Yr US Treasury 2.48
30 Yr US Treasury 2.89

RECENT TRANSACTIONS
$10,000,000 Non-Recourse Quick Close Cash-Out Refinance in Orange County, CA

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

Jonathan Lee
Principal/Managing Director
Shahin Yazdi
Principal/Managing Director
David Stepanchak
Senior Vice President
Matthew Kirisits
Vice President
Olga Alworth
Senior Vice President
Samuel Sarshar
Assistant Vice President

$9,400,000 Non-Recourse Cash-Out Bridge Financing in Downtown Los Angeles, CA

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.

Advisors

Alina Mardesich
Senior Vice President
Michael Smilove
Assistant Vice President

Acquisition Financing for Single-Tenant Industrial Property in El Segundo, CA

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
Principal/Co-Founder
Drew Freeman
Assistant Vice President

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HOT MONEY
Non-Recourse Permanent Financing Starting at 3.69%

George Smith Partners is placing non-recourse financing for permanent transactions up to $40,000,000 for properties in primary California coastal markets. Lender will finance office, industrial, grocery anchored retail, multifamily and self-storage. Lender will fund up to 55% of purchase price with terms up to ten years.

More Hot Money ›

FEATURED INTERVIEW

Malcolm Davies, Principal/Managing Director of GSP was featured on Business Rockstars. Malcolm explains his entrepreneurial journey and gives advice to aspiring business owners and investors.

Click here to watch the video.

 

If you have an inquiry regarding George Smith Partners’ commercial real estate financing, please contact your GSP representative or Todd August, Chief Operating Officer (310) 867-2995 or TAugust@GSPartners.com


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10250 Constellation Blvd., Ste. 2700
Los Angeles, CA 90067
Office 310.557.8336
Fax 310.557.1276
Email finfacts@finfacts.net
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