Finfacts XXIV – No. 445

Transaction Description:

George Smith Partners arranged 5-year, permanent, non-recourse, financing for a 98% occupied, multi-tenant shopping center in Orlando, Florida. The Property is a neighborhood center with 26 tenants and is situated in a prime retail corridor in the Orlando market. The Sponsor is a longtime and valued client of GSP. Tenants include a mix of local and national chain restaurants, dental care, hair care, and daily needs services. The Sponsor selected a 5-year term that allows prepayment flexibility after year 2 (see below). The rate was locked in October, just before the spike in Treasury rates. GSP arranged the financing with a lender that allowed flexibility in regard to releasing a portion of the collateral that doesn’t include any of the retail tenants. The Life Company execution allowed for non-recourse refinance within a volatile capital markets environment.

Transaction Description:

George Smith Partners successfully closed a $42,500,000 ground-up construction loan on a 179-unit garden-style multifamily project located in Puyallup, Washington. The project is composed of eight multifamily buildings and three retail buildings built on a ten-acre site. The Sponsors had been assembling parcels for several years in preparation for this development and engaged GSP to source a full suite of term sheets providing a spectrum of leverage and structure options. The closing period took place over 55 business days from date of term sheet execution.

The loan was structured as a construction-to-permanent loan, converting from interest-only payments to principle-and-interest payments at the earlier of 30 months or the property achieving a 1.20 DSC. The P&I payments are calculated using a 30-year amortization schedule. The Sponsors are eligible for an equity earnout once the property stabilizes.