Senior Loan: $10,000,000
SBA: $5,000,000
Rate: Senior Loan: 4.92%
SBA: 4.87%
Term: 25 Years
LTPP: 88%
Prepayment: 5-5-4-4-3-3-2-2-1-1

Transaction Description:

George Smith Partners arranged $15,000,000 in SBA owner-user acquisition financing for a multi-tenant office property located in Beverly Hills, CA. The Sponsor approached GSP for assistance in acquiring the building they had been occupying as a tenant for many years past. Instead of losing cash to rent, they decided to invest in ownership. The Sponsor had tried securing both conventional owner-user and SBA financing on their own before reaching out to GSP but was unsuccessful. This was primarily due to the state of the market with lenders having a pessimistic outlook on office, and the SBA eligibility requirements becoming increasingly more difficult to meet since the COVID pandemic.

Upon getting the assignment, GSP quickly put together a concise and marketable package that would present well to both conventional lenders and the SBA. GSP used their expertise to source attractive terms for the Sponsor and structured a total loan facility equal to 88% of the purchase price, at a sub-5% blended rate.

Additionally, GSP managed to lock the senior portion of the loan despite the volatile interest rate market and quickly worked toward SBA approval to lock the rate on the SBA portion before the next month’s rate hike.

Securing high leverage and keeping the Sponsor’s equity investment low was crucial to ensure the Sponsor could keep the majority of their liquidity in hand for their operations and potential property renovations. Thanks to GSP, the Sponsor successfully purchased the building with financing terms that exceeded their expectations.

Rate: 5.14% Fixed
Amortization: 30 Years
Term: 7 Years
Guaranty: Non-Recourse

Transaction Description:

George Smith Partners successfully advised on the placement of a $1,850,000 cash-out refinance of a 72,471 SF commercial condominium comprising 4-levels of public parking and storage facility located within a 38-story residential high-rise in downtown Los Angeles. Although the property is stabilized, lenders expressed concerns over the condominium collateral, special-purpose, and negative cash flow history during COVID.

GSP was able to get a Lender comfortable with the sustainability of the net operating income vis-a-vie the Borrower’s ownership and near-stabilization of its 3-levels of commercial, retail, and office space located within the same project. The Sponsor’s primary objective was to refinance and lower their cost of capital which was previously at 9%. GSP was able to successfully replace the loan with a non-recourse bank loan at 5.14% fixed in addition to providing $350,000 in cash-out proceeds. The rate was locked at the beginning stages of the upward trend in interest rates and GSP was able to get the bank to accommodate an additional rate lock extension.