FINfacts™ XXIV – No. 245 | November 25, 2020

Prime Rate 3.25%
1 Month LIBOR 0.14%
6 Month LIBOR 0.25%
5 Yr Swap 0.46%
10 Yr Swap 0.88%
5 Yr US Treasury 0.39%
10 Yr US Treasury 0.88%
30 Yr US Treasury 1.62%


$44,000,000 Non-participating Bridge Financing for Industrial Acquisition and Reposition, 95% LTC, West Coast

Rate: LIBOR + 3.95% with a floor on LIBOR of 50 basis points
Term: 3 years interest only
Amortization: Two 1-year extensions with 30-year amortization
LTC: 95%
Guaranty: Recourse, Completion of deferred maintenance and Cap-Ex, “bad” acts and environmental
Lender Fees: 1% origination and 0.25% exit fee

Transaction Description:

George Smith Partners successfully arranged $44,000,000 in non-recourse, non-participating bridge financing at 95% of cost for the lease-up and repositioning of a 5-property, 650,000 SF, industrial complex located on the West Coast. The Sponsor purchased the complex vacant and the seller carried the first mortgage for 4 months. From the open of escrow with the Seller, to the closing of this loan, there was over 82% of the available space leased making up 77% of rent with letters of intent for the remainder of the space. Although this was during the COVID-19 pandemic, and there was considerable deferred maintenance and capital expenditure required to get the properties rent ready, the space leased quickly due to the Sponsor expertise and relationships and a strong submarket.

The loan provides funds for the deferred maintenance, the capital expenditures, the tenant improvements, leasing commission and carry until the tenants are in and paying rent. Additionally, there is an earn-out of $2,000,000 after the 18th month as the asset has other potential value-add attributes.


Portrait Robert Horton

Cash-Out Bridge Loan for Medical Office Building, Laguna Niguel, CA

Rate: 5.90%
Term: 12 months
Amortization: Interest Only
Loan Fee: 1.0%
Prepayment: Open
Options: Two 6-Month Extensions; 0.50% Fee
Personal Guaranty: None

Transaction Description:

George Smith Partners secured a senior bridge loan for a 21,303 square foot office building in Laguna Niguel, CA. The Subject Property was unencumbered; hence the entire loan was comprised of cash-out proceeds which the Borrower is utilizing for a separate project they are developing. The loan represents approximately 60% of the original purchase price and was structured with a 1-year initial term with interest only payments. The loan allows for open prepayment and carries two 6-month extension options.

The loan was collateralized by a recently renovated 21,303 square foot office building. The building had recently upgraded the facade, landscaping, parking lot, entrance, lobby, bathrooms, HVAC and other interior finishes. A new roof and solar system had also been installed. The building was 47% occupied at loan funding. The first-floor single tenant had vacated at lease expiration several months prior leaving limited debt service coverage and unusually high vacancy compounded by other COVID related issues.

GSP selected a lender that was able to move incredibly quick to accommodate the Borrower’s development timeline. The Lender’s credit department approved the loan one-week post submission and did not require an appraisal to close. The Lender underwrote to the stabilized asset value, closed with no debt service reserve and no personal recourse.


Matthew Kirisits

Non-Recourse Permanent Financing

George Smith Partners is working with a national balance sheet lender providing fixed-rate, long term permanent financing for stabilized property types including self-storage, industrial, apartments, and office/medical office in primary and secondary markets. The lender will also consider retail – grocery/drug anchor with more than 50% of tenants open/operating for loans from $4,000,000 to $25,000,000. With the ability to advance 65% of cost, pricing is in the low/mid 3’s for terms ranging from 7-10 years.

More Hot Money ›

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


Constellation Place
10250 Constellation Blvd., Ste. 2700
Los Angeles, CA 90067
Office 310.557.8336
Fax 310.557.1276
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