| Transaction of the Week |  | |  | | Transaction Description: | | $11,400,000 Refinance of a Non-Traditional Grocery Building GSP arranged the no-cash-out refinance for a 45,000 SF stabilized grocery anchored retail building in Westwood, California. The property, owned and managed since 1997, includes a restaurant, single-screen theatre and two public parking structures. The non-recourse loan amortizes over 30 years, and is fixed for 20 years at 5.20%. |
Challenge: Parking revenue contributes 17% to the Gross Income. This disproportionate amount of parking revenue, in conjunction with the single-screen theatre component added a complex dynamic for long-term capital providers who are accustomed to more traditional Grocery/Drug centers. Valuation also came into question given the special uses of the collateral. The Borrower also required a lengthy fixed rate term with ample amortization. |
Solution: GSP identified a portfolio lender who understands the strength and in-fill dynamics of Westwood Village, and its significant parking constraints. Full credit for the parking and theatre revenue was underwritten to offer a 1.60 DCR to the capital provider. GSP worked closely with the appraiser to provide sufficient parking income comparables in support of a 55% LTV, and negotiated a 20-year fixed term with the Lender. | | | Rate: 5.20% fixed for 20 Years | | Term: 20 Years | | Amort: 30 Years | | LTV: 55% | | DCR: 1.60 | | Prepayment: Yield Maintenance | | Lender Fee: Par | | Brokers: Steve Bram, Jonathan Lee, Shine Cheng | | | |  | | | | Single Tenant Note Acquisition/Refinance A National Credit Company has rolled out an aggressive note acquisition/refinance program targeting predominately single tenant uses. Single notes or pools of notes may be funded to 75% LTV and a 1.15 DCR. Single notes will range from $5,000,000 to $15,000,000 with no size limit on portfolios. Some multi-tenant transactions will be underwritten, although the majority of the revenue must come from a single tenant. Assets may be owner-user or for an investor borrower. Pricing will vary based on leverage, location, and credit quality. | | | | Hot Money | Regional Bank Lending Up to 80% LTV in Southern California A Southern California Regional Bank is funding multifamily debt to 80% LTV. Retail, office, industrial, and special use properties are leveraged to 70% - 75% of value. This Lender will consider underperforming assets with a below break-even debt coverage for an experienced operator. Pricing starts at P+1% with a 5.25% floor; fixed-rate financing is currently unavailable. Typical structures contain a 5-year term and a 25-year amortization schedule. Loans above $15,000,000 will be considered on a situational basis. | | | If you have an inquiry regarding George Smith Partners' commercial real estate financing, please contact your GSP representative or Todd August, Chief Operating Officer, at (310) 867-2995 or TAugust@GSPartners.com. | | | Respond to GSP's Latest LinkedIn Poll | CRE mortgage maturities are at historic levels. It is estimated that over $1.3T of commercial mortgages will mature during the next five years. How will the maturities wave impact business in 2012. Give us your opinion here. | | | Speakers Corner | Managing Director Steve Bram will be a featured panelist at the January 11th Commercial Real Estate Women's (CREW) Conference to be held at the Los Angeles Biltmore Hotel. Mr. Bram will be joined on the panel to discuss Commercial Real Estate Lending in 2012 by several national capital providers, appraisers and attorneys. This luncheon is open to the public and offers a discount for early registration. For more information and to register, please click here. | | | In The News | Founding Partner and Managing Member Gary E. Mozer was recently quoted in the "Affordable Housing Finance" newsletter on Freddie Mac's entry into the value-add segment for multifamily finance. This program offers an attractive middle-ground between cheap recourse bank capital and expensive private funds. The entire article may be found here. | |
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