Rate: 4.25% Fixed for 10 years
Term: 10 years
Amortization: 30 years
Prepayment Penalty: Defeasance
DCR: 1.30x
Interest Only: 12-months
Guarantee: Non-Recourse
Origination Fees: Par

Transaction Description:
George Smith Partners secured $9,050,000 for the non-recourse, cash-out refinance of two unanchored, multi-tenant retail centers in Columbus, Ohio. The two properties were cross-collateralized allowing the Borrower to benefit from securing a higher leverage loan. The permanent loan is fixed at 4.25% for ten years with 12 months of interest only and a defeasance prepayment penalty structure.

Challenges:
One of the retail centers had a tenant whose parent company was in bankruptcy proceedings and vacated their space during our loan process. The other retail center, which is newly developed, was in the process of lease up and had a few tenants not yet in occupancy prior to loan closing. The market had very few comparables to support our underwritten value of the Subject Property.

Solution:
GSP identified a capital source that understood the strength of the asset, location and the experience of the Sponsor. Based on these strengths and additional market support provided, the Lender was able to offer a cross-collateralized structure, which maximized proceeds at 73% LTV with 12 months of interest only payments. The Capital Provider was also able to fund the loan with a few tenants not in occupancy. This allowed the Sponsor to take advantage of today’s low interest rate environment and eliminate interest rate risk.

Advisors

Matthew Kirisits Director

Blended Rate: 8.00%
Loan to Purchase Price: Up to 85% (83% on this transaction)
Term: 12 Months
Guaranty: Non-Recourse

Transaction Description:

George Smith Partners arranged acquisition bridge financing for a value-add, multi-family property in Los Angeles, California. One of our more experienced multi-family owner/operators has become experienced in sourcing opportunities to quickly close on troubled multi-family properties. His ability to act quickly often allows him to become the chosen Buyer, purchasing these Properties at a large discount.

GSP worked with a local REIT to develop a program that includes a first and second mortgage of up to 85% of acquisition price. The loan is designed to provide the same surety of close as an all-cash buyer, with no appraisal needed and the ability to close as fast as 5 business days. The loan is non-recourse and has no prepayment penalty.

These loans are cheaper and easier than equity partners and allow the Sponsor to take advantage of smaller opportunities using very little cash. With less than $400,000 of equity, the Sponsor was able to purchase a $2,015,000 building. At close the Subject Property was worth close to $2,500,000, allowing the Sponsor to quickly flip the Property. This is the third time GSP has used this custom created loan program to procure financing for our client.

Rate: 7.90% Fixed
Term: 12 Months
Amortization: Interest Only
Loan to Value: 60%
Lender Fee: 1.00%
Prepayment: Open Full Term
Guarantee: Non-Recourse

Transaction Description:

GSP arranged the $1,350,000 non-recourse first mortgage from a REIT to acquire two separate Target shadow-anchored outparcels totaling just over one acre. The Lender was comfortable with providing the acquisition financing due to the Borrower having previously entitled the land for a multi-tenant retail pad during the Borrower’s option period to purchase the land. The loan provides 12 months of bridge term while the Borrower pre-leases the project and finalizes construction drawings. Although the loan is non-recourse, the Lender did not require an appraisal or other third-party reports, nor did it require an interest or carry reserve although there is no in-place cash flow on either parcel. Sized to 60% of purchase price, the loan priced at 7.90% fixed for the 12-month loan duration.