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12/03/20
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George Smith Partners recently arranged $44 mil in non-recourse, non-participating bridge financing at 95% of cost for the lease-up and repositioning of a five-property, 650k sf industrial complex located on the West Coast.
The sponsor purchased the complex vacant, with the seller carrying the first mortgage for four months. From the open of escrow to the closing of this loan, over 82% of the available space was leased, making up 77% of rent, with letters of intent for the remainder of the space.
Although this took place during the COVID-19 pandemic, and there was considerable deferred maintenance and capital expenditure required to get the properties rent ready, the space leased quickly due to the sponsor’s expertise and relationships, in addition to the security being located in a strong submarket.
The loan provides funds for deferred maintenance, capital expenditures, tenant improvements, leasing commission and carry until the tenants are in and paying rent. Additionally, there is an earn-out of $2 mil after the 18th month as the asset has other potential value-add attributes.
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