Saturday, March 31, 2012

George Smith Partners Arranges $9.9 Million in Financing for Clients

Los Angeles, CA– Commercial real estate investment banking firm George Smith Partners has closed four transactions on behalf of its clients, totaling $9.9 million.

“George Smith Partners has seen a steady increase in the volume of commercial real estate loan activity over the past quarter,” said Gary Mozer (top right photo), Principal and Managing Director of George Smith Partners.

“The market is steadily moving back into a positive place and we are seeing many of our clients both new and old, returning to the market to invest and reposition properties. These clients look to GSP’s experience and expertise to help them achieve optimal financing on their various investments across the nation.”
Transaction #1:

George Smith Partners’ Principal and Managing Director Gary Mozer and Vice President Michelle Lee (top left photo) have secured $5 million in permanent financing for a 12,500 square-foot retail center in Santa Monica, Calif.  The retail 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.”

GSP achieved 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.

Transaction #2:

George Smith Partners’ Vice President Shahin Yazdi (middle right photo) secured $2.2 million for the cash-out refinance of a seven-unit retail building in Southern California.

“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.”

Yazdi secured this recourse loan at a rate of 5.375 percent for five years, with an amortization of 25 years and a loan-to-value of 70 percent.

Transaction #3:

 George Smith Partners’ Vice President Malcolm Davies (middle left photo) secured $1.5 million in financing for the acquisition of a coastal property consisting of a restaurant and apartments in the Pacific Beach neighborhood of San Diego, Calif. The loan provided the client with capital to redevelop and reposition the restaurant into a new concept.

“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.”

Davies secured this recourse loan at a rate of 6.7 percent for 10 years, with an amortization of 30 years and a loan-to-cost of 90 percent.

Transaction #4:

George Smith Partners’ Vice President Shahin Yazdi secured $1.2 million 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.  

 “In order to find a lender willing to finance our out-of-state investor, we highlighted the experience of the property’s management company and its portfolio of properties, which demonstrated to the lender that the multifamily community had stabilized operations and substantial cash flow,” noted Yazdi.

“Through our extensive capital relationships, we were able to identify an institutional lender that was active in this tertiary market and willing to provide financing to our client. The lender was also able to fund our client beyond its pre-determined LTV constraints because of the extensive list of capital improvements our client had made to the property.”

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.


Corynne Randel/ Judith Brower
Brower, Miller & Cole
(949) 955-7940

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