George Smith Partners

California Bank Aggressively Seeks Bridge Product

asandler — Thu, 10 May 2012 16:03:30 +0000

5 – 9 – 12 A California based bank is aggressively seeking assets slated for reposition to fulfill their bridge loan allocation. The floating rate program offers up to 70% LTV with no prepayment penalty and a mini-perm option upon … Continue reading →

$2,000,000 Cash-Out Multifamily Refinance During Forbearance

asandler — Thu, 10 May 2012 16:02:30 +0000

5 – 9 – 12

Transaction Description: GSP refinanced a newly renovated West Hollywood apartment building as the asset obtained occupancy stabilization. Pricing is fixed for three-years at 4.24%, prior to floating at 315 basis-points over 6-month LIBOR. The Loan self-liquidates and amortizes over 30 years.

Challenge: The Property had gone into maturity default with the prior lender, resulting in a brief forbearance period. The Loan Guarantor had created numerous family trusts and other entities for estate purposes, adding complexity to the underwriting and closing process, particularly for a small bank used to financing smaller less-sophisticated borrowers. The Guarantor had provided a preferred equity investment to the Borrowing Entity through an LLC, further complicating the underwriting and closing documentation. The Borrower required a return of their trapped equity despite the current loan default.

Solution: The newly renovated property and desirable location obtained 100% occupancy immediately after renovation. The Guarantor proved a net worth far in excess of the loan amount. The Lender became comfortable with the Borrower structural issues with the extensive documentation GSP provided. All third party reports were ordered on a “rush” basis to minimize the forbearance period. Based on GSP underwriting, the Lender was comfortable cashing-out up to 20% of the Borrower’s equity.

Rate: 4.24% Fixed for 3 Years

Term: 30 Years

Amort: 30 Years

LTV: 65%

Prepayment: 3-2-1, Open

Recourse

Lender Fee: Par

Broker: Nathan Auslander

$7,500,000 Reposition Refinance of a Salt Lake City Retail Center

asandler — Thu, 10 May 2012 16:00:43 +0000

5 – 9 – 12

Transaction Description: George Smith Partners successfully placed the $7,500,000 senior loan on a 54% occupied retail center in Salt Lake City, Utah. The owner has had to address long-standing challenges recapturing vacant anchor space. The lack of an anchor resulted in higher over-all vacancy and the property’s underperformance, presenting a significant challenge to lenders. GSP demonstrated that the property’s recent leasing velocity, (over 20,000 sf in six months and another 10,000 sf LOI outstanding at funding), was a direct result of the Borrower’s aggressive leasing strategy. GSP identified a lender comfortable with a very experienced sponsorship and the property’s location at the primary retail intersection in a strong market.

Rate: LIBOR + 3.0%

Term: 3 Years + extensions

Amort: Interest Only

LTV: 65%

Prepayment: 2%, 1%, open

Recourse

Brokers: Gary E. Mozer, Josh Roseman

SoCal Bank: Bridge, Mini-perm, Construction Debt

asandler — Thu, 03 May 2012 16:31:54 +0000

5 – 2 – 12

George Smith Partners is working with a new commercial lender consisting of a four-bank roll-up. With a clean balance sheet and no legacy issues, this regional lender will fund cash flowing or less-than cash flowing transactions to $30,000,000. Make-sense underwriting is used for sizing although strong recourse sponsorship is required for higher LTV and/or transactions involving moving pieces. Out-of-market transactions are considered for SoCal borrowers. Pricing is aggressive for clients who may not size for money center banks.

$17,250,000 Forward Commitment Financing for Big Box Retail Pad

asandler — Thu, 03 May 2012 16:30:51 +0000

5 - 2 – 12

Transaction Description: George Smith Partners arranged the 65% LTV financing a new big box single tenant credit retailer. The rate was locked for 130 days (over four months) in November 2011. GSP identified a life insurance company who locked the entire coupon with no rate premium. The site is a 8.38 acre parcel adjacent to a 500,000 + s.f. retail center also owned by the client. The center (not part of our collateral) includes a 50,000 s.f. grocery store, movie theater, high end chain restaurants within a contemporary outdoor setting. The investment grade tenant executed a 30 year ground lease + extensions; and constructed their own store that opens this week. The lease required the Sponsor to deliver a construction ready “clean dry pad” to tenant for their building construction. GSP arranged the construction financing last year. Our Client demolished a functionally obsolete, freestanding 200,000 s.f. building that had been vacated by a failed retailer, then added utilities and raised the pad using pilings to create the proper foundation for the new store. This was GSP’s 12th financing for this client.

Rate: 4.45% on a 30/360 amortization schedule

Term: 10 Years

Amort: 30 Years

LTV: 65%

Non-recourse

Brokers:
Steve Bram,
David
R. Pascale, Jr.

$8,000,000 Cash-Out CMBS Financing for a Los Angeles Industrial Property

asandler — Fri, 27 Apr 2012 22:15:27 +0000

4 – 18 -12

Transaction Description: GSP arranged the non-recourse, cash-out loan on a 165,000 sq. ft. industrial property in Gardena, (Los Angeles) California. The property consists of seven separate adjacent concrete tilt up buildings constructed in the 1970’s, and contains a mix of both warehouse and flex space.

Challenge: The Sponsor’s objectives were to secure non-recourse financing with maximum cash-out proceeds at the lowest rate available. A high percentage of month-to-month tenancies and near-term lease expirations complicated the underwriting despite the 100% occupancy. The property condition report dictated significant expenditures on capital improvements.

Solution: GSP identified a number of Insurance Company and CMBS lenders that favor industrial properties. They were therefore able to present competing loan proposals for the sponsor’s consideration without the requirement for a repayment guarantee. To address rollover exposure, GSP demonstrated support for the month-to-month tenancies with evidence of strong historical occupancies and excellent market fundamentals. GSP was able to negotiate a lower reserve and holdback, as well as an ability to release a portion of the holdback at closing to purchase required building materials. While in application, GSP worked with the lender to increase proceeds and reduce the interest rate spread to partially offset an increase in the 10-year swap rate.

Rate: 10-Year SWAPs + 290

Term: 10 Years

Amort: 30 Years

LTV: 67%

DCR: 1.34

Non-recourse

Lender Fee: Par

Brokers: Gary M. Tenzer, Eli Wexler

$10,000,000 Portfolio Refinance w/ARMs tied to LIBOR and CMT

asandler — Fri, 27 Apr 2012 16:35:27 +0000

4 – 25 – 12

Transaction Description: In a demonstration of organized chaos, GSP AVP Jason Gaffner successfully placed 5 separate multifamily loans on 5 unrelated multifamily assets for the same borrower. The portfolio consisted of 121 units located across the San Fernando Valley. The non-recourse loans allowed the sponsor to reduce his cost of carry by over 200 basis-points, while obtaining a small return of equity. Each standalone transaction is fixed for 5 years at 3.85% prior to floating for the remaining 10 year term. The loans are sized to a 1.20 DCR and 70% LTV.

Challenge: After LOI execution, the Sponsor chose to diversify his long-term floating rate risk. The non-crossing of the transactions required the processing of five separate loans, mandating duplication and logistic controls.

Solution: As an accommodation to the borrower, GSP successfully negotiated a blend of LIBOR and CMT-based ARMs for each of the five transactions. There was no rate add-on for this additional complexity. GSP worked diligently in communicating lender and 3rd party vendor needs with the borrower. The open lines and constant updates kept all parties informed throughout the due diligence period.

Rate: 3.85%

Term: 5 Years Fixed, 10 Years Float

Amort: 30 Years

LTV: 70%

DCR: 1.20

Prepayment: 3, 2, 1, open

Non-recourse

Lender Fee: Par

Broker: Jason Gaffner

$5,250,000 Non-Recourse Regional Bank Cash-Out Refinance

asandler — Fri, 27 Apr 2012 16:33:19 +0000

4 – 25 – 12

Transaction Description: George Smith Partners placed the 15 year cash-out refinance of a 3-story garden-style office building in West Los Angeles. The loan amortizes over 25 years, is non-recourse, and carries a 4.75% coupon. The resulting 15-year fixed coupon is lower than the 10-year quotes obtained by the borrower prior to engaging George Smith Partners.

Challenge: The borrower insisted on the longest fixed rate term available on a non-recourse basis. Life Insurance Companies typically provide the longest fixed rate terms at the most aggressive pricing. This asset, while in an excellent market, does not qualify for Life Company underwriting. The tenant profile of the 60 small tenants made the processing of a cmbs loan untenable with regard to SNDA and estoppel requirements.

Solution: GSP tapped their portfolio relationships and identified a bank willing to underwrite and fund a non-recourse loan to 60% LTV. They were comfortable with the borrowers’ experience and ownership history to allow a small return of capital. GSP demonstrated (i) historic occupancy was 95%+ (ii) an extensive waiting list, and (iii) highlighted the SNDA language in all current leases. On the basis of these facts, the Lender agreed to waive all estoppel and SNDA requirements.

Rate: 4.75% Fixed for 15 Years

Term: 15 Years

Amort: 25 Years

LTV: 60%

Non-recourse

Lender Fee: 1 point

Brokers: David Rifkind, Eric Hamermesh, Omer Ivanir

Non-Recourse Bridge Financing from $5,000,000

asandler — Fri, 27 Apr 2012 16:29:22 +0000

4 – 25 – 12

George Smith Partners has identified a capital provider funding reposition transactions nationwide. The portfolio lender, a mid-states regional bank, will lend on the four primary product types, plus condo inventory backed transactions. The bank will fund from $5,000,000 to $25,000,000 nationally in the top 100 markets on a non-recourse basis. Rates range from 7% to 9% interest only for the three-year term. DPOs and value-add construction will be funded with good news dollars but no ground-up is available at this time.

$25,000,000 Joint Venture Acquisition & Construction Equity

asandler — Thu, 12 Apr 2012 23:13:26 +0000

4 – 11 – 2012

Transaction Description:

George Smith Partners arranged the $25,000,000 Joint Venture equity to acquire a to-be-built multi-family development site in the Inland Empire, California. GSP was engaged with a very short timeframe to secure an equity partner that would permit the Sponsor to acquire the dirt in a competitive bid environment. The acquisition process required a “closed as applied for” structure should the Sponsor be awarded this development opportunity. GSP made a market to ensure no surprises after the deposit became non-refundable, and assisted in the negotiation of a venture that would provide capital through construction and stabilization. The new venture added overwhelming support assisting the Sponsor to win the bid. The Sponsor is expanding their Southern California multifamily platform and is currently working with this institutional partner on a subsequent multifamily development site.

Brokers: Malcolm Davies, Michelle Lee