Finfacts XXIV – No. 415

Transaction Description: 

George Smith Partners arranged permanent 7-year non-recourse financing for a 98% occupied multi-tenant shopping center in the Inland Empire.   The property is a neighborhood center with 20 tenants and shadow-anchored by a major grocery chain with a long history at the center. Other tenants include a mix of local and national chain restaurants, dental, and hair care. The Sponsor was able to execute new financing near their existing loan maturity and fixed rate at application to minimize interest rate risk. The Sponsor recently re-tenanted a vacant CVS junior anchor space on a short-term lease to a local operator, which allows the Sponsor time to decide the future of the center. The Sponsor chose a 7-year structure in order to allow flexibility in the next 3 or 4 years (minimizing prepayment costs).  The life-company financing allowed for a fixed rate, non-recourse refinance in a volatile capital markets environment.   

Transaction Description: 

George Smith Partners sourced $14,425,000 in bridge financing for a newly constructed residential condominium building in California. The 12-month term financing was to replace the construction loan and provide time for the units to sell.  

The loan is fixed at a rate of 8.9%, well below market rates for similar bridge loans. By comparison, most of the lenders in the market quoted a floating rate above 11%. The loan is non-recourse and required minimal due diligence from the Sponsor.  

The loan provides a total of 57% LTC and 53% LTV. It closed in just under 40 days from the signed term sheet.