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3/29/12
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Commercial real estate investment banking firm George Smith Partners (GSP) recently closed four transactions, totaling $9.9 mil. In one deal, GSP’ Principal and Managing Director Gary Mozer and Vice President Michelle Lee secured $5 mil in permanent financing for a 12.5k sf retail center in Santa Monica. The center, which is located on a high traffic corner, was fully leased and 80 percent occupied at the close of this financing.
“Facing a maturing loan, the building owner came to GSP in need of a quick, conservative loan to pay off its existing debt on the 45-year-old building,” explained Mozer. “By highlighting the property’s prime location, as well as our client’s strong rental history, we were able to find a lender willing to finance the loan, while simultaneously securing a $3 million cash-out refinancing for the owner.”
The loan has a low loan-to-value of 50 percent, allowing the lender to forego traditional requirements for reserves or impounds on the loan. The nonrecourse loan closed with an interest rate of 5.5 percent for 10 years, with an amortization of 27 years.
GSP Vice President Shahin Yazdi secured $2.2 mil for the cash-out refinance of a seven-unit retail building in Southern California. The loan has a rate of 5.375 percent for five years, with an amortization of 25 years and a loan-to-value of 70 percent.
“This property is held in a Trust with multiple owners, of which only half were willing to sign the repayment guarantee. Most lenders require 51 percent participation or better in order to approve financing,” explained Yazdi. “By displaying the financial strength and asset control of the owners who were willing to sign the guarantee, the lender was able to make an exception on its recourse policy and finance this loan.”
In the third transaction, GSP Vice President Malcolm Davies secured $1.5 mil in financing for the acquisition of a coastal property consisting of a restaurant and apartments in the Pacific Beach neighborhood of San Diego. The loan provided the client with capital to redevelop and reposition the restaurant into a new concept. The loan has a rate of 6.7 percent for 10 years, with an amortization of 30 years and a loan-to-cost of 90 percent.
“The capital providers in the market were concerned that the restaurant’s planned rebranding would negatively impact the cash flow of the established restaurant,” explained Davies. “We were successful in achieving financing for the client by using the property’s stabilized apartment units, as well as the equity of the restaurant’s liquor license, as the additional collateral needed to secure the loan.”
And in the fourth deal, GSP’s Yazdi secured $1.2 mil in financing for the cash-out refinance of a tertiary multifamily building in San Marcos, Texas. The 25-unit apartment building was constructed in 1991. The owner is an out-of-state investor who required cash-out financing for the highly leveraged property necessitating a loan-to-value of at least 75 percent. The 10-year fixed rate loan closed with a rate of 5.65 percent, with an amortization of 30 years and a loan-to-value of 75 percent.
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