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6/22/20
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George Smith Partners (GSP) has arranged $13.5 mil in quick-close, cash out, bridge-to-bridge financing for a multi-tenant retail center in L.A;’s Echo Park area.
The borrower wanted to take out their existing lender due to an issue with lease approval for a cannabis tenant. In order to purchase an out-parcel on the property, the cannabis user needed a lease in place so it could obtain a license from the local jurisdiction. If approvals were not granted, the borrower would have the ability to break the lease.
GSP’s Gary Mozer, Michael Anderson-Mitterling and Kyle Howerton identified a non-bank lender who was comfortable approving a lease on a space which may never be occupied. The lender’s flexible prepayment structure allowed the borrower to execute their business plan as the cannabis tenant planned to acquire an out-parcel on the property after receiving approvals from the City.
The first trust deed was sized to 60% of value with no hold back requirement for interest reserve or capital expenditures. The non-recourse, interest-only loan does not carry any prepayment penalties. The borrower plans to take out the loan within 12 months with long-term fixed rate debt.
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