FINfacts™ XXIV – No. 354 | February 1, 2023

Prime Rate 7.50%
1 Month LIBOR 4.57%
6 Month LIBOR 5.10%
5 Yr SOFR Swap 3.38%
10 Yr SOFR Swap 3.18%
5 Yr US Treasury 3.59%
10 Yr US Treasury 3.47%
30 Yr US Treasury 3.61%

$38,500,000 Cash-Out Refinance of 98% Leased Grocery-Anchored Retail Center; Utah

Term: 5 Years, 1-year I/O
Rate: SOFR + 2.46%
LTV: 65%
Fee: 1%

Transaction Description:

George Smith Partners successfully placed $38,500,000 of floating-rate debt for the cash-out refinancing of a 372,000-square-foot grocery-anchored retail center located in Utah. Fully leased and anchored by tenants like Super Target, Best Buy, and PetSmart, the property boasts a dominant submarket position owing to its diverse assortment of community-oriented tenants and main-and-main location. Additionally, the Sponsor had expertly navigated the difficult market conditions caused by the Covid-19 pandemic, notably through subdividing and re-leasing 45,000 SF of space to credit-rated tenants at a rent 70% higher than the previous occupant, which had vacated due to bankruptcy. Loan proceeds were used to pay off existing debt, fund tenant improvements and leasing commissions, and repatriate Sponsor equity.

Most non-CMBS lenders contacted had sought a full repayment guaranty because of the retail asset class. However, GSP successfully sourced a flexible lender willing to structure recourse with a 25% springing repayment guaranty, which would only come into effect only if an anchor tenant terminated their lease or ceased operations. Furthermore, the Property’s strong sponsorship and well-executed business plan effectively aided GSP to source debt with an extremely competitive rate and significant cash-out at close.

Permanent Financing for NNN Single Tenant Retail; Mechanicsburg, PA

Rate: 4.98% Fixed
LTV: 65%
Term: 10 Years
Origination Fee: 0.25%
Amortization: 30 Years
Prepayment: Open
Guaranty: Recourse

Transaction Description:

George Smith Partners arranged $3,669,250 in fixed-rate financing to refinance a single-tenant NNN Rite-Aid located in Mechanicsburg, Pennsylvania. GSP sourced a lender that would provide 10-year, fixed-rate debt with no prepayment penalty in order to give the sponsor maximum flexibility. The financing is fixed at 4.98% amortizing over a 30-year period. Rite Aid signed a 26-year lease that expires at the end of the loan term. The tenant’s lease includes four 5-year options at fixed rents.


Steve Bram
Managing Director & Principal / GSP Co-Founder
David R. Pascale, Jr.
Senior Vice President
Allison Higgins
Senior Vice President
Nick Rogers
Vice President

Quick Close Value-Add Financing

George Smith Partners is working with a capital provider financing value-add transactions up to $100,000,000. With rates starting at 30-Day Term SOFR +5.00%, all asset types are eligible including development sites and infill land. With leverage up to 65%, this lender offers full-term interest only and non-recourse terms. Lending nationwide, they are able to close in as quickly as 2 weeks.

More Hot Money ›

Pascale's Portrait
Fed Kicks Off 2023 With A Quarter Point Increase, Markets Rally on Dovish Remarks by Powell    

The Federal Reserve raised the Fed Funds rate by 0.25% today as markets expected. The target range is now 4.50-4.75% as the Fed has increased rates in 8 consecutive meetings beginning in March 2021. The rate is the highest since October 2007. Recent data indicating a slowdown in inflation has raised hopes that “the pause” may be occurring soon, perhaps after the next Fed meeting in March. The accompanying statement with the increase retained the language “ongoing increases in the target range” disappointed markets by implying multiple increases are planned. Fed Chair Powell’s post statement presser was closely watched. He acknowledged the slowdown,  “And while recent developments are encouraging, we will need substantially more evidence to be confident that inflation is on a sustained downward path.” He also said its “premature” to declare victory. Of course, Powell’s intent is to seem hawkish until the moment he cuts in order to keep markets from “getting ahead of the Fed.” It’s also important to note that positive “Real Interest Rates” are now just being achieved. As inflation is at 4.4% (using the annual core PCE from December), the Fed just barely hit positive territory at 4.50-4.75%. The divergence between market expectations and Powell’s rhetoric is stark – markets expect a 0.25% increase in March, followed by a pause at the May meeting, and possible rate cutting by 4Q 2023. Powell has repeatedly insisted that the Fed is not cutting this year. He did throw doves a bone during the presser with 2 statements: he acknowledged that “the disinflationary process has started”  – boom! The 10 year Treasury rallied from 3.51 to 3.39% immediately upon this statement. Then he remarked that he said it is “certainly possible” that the Fed Funds rate stays below 5% – meaning one more 0.25% increase before the pause. Futures markets predict an 85% chance of a 0.25% increase in March, with 15% predicting no rate cut. May futures indicate a 63% chance of a pause or cut at that time. Stay tuned…

More Perspectives ›

If you have an inquiry regarding George Smith Partners’ commercial real estate financing, please contact your GSP representative or Jessica Mania, at (310) 867-2974 or


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