Monday, May 9, 2016

George Smith Partners Secures Acquisition Financing for $43 Million Purchase of Iconic Fred Segal Melrose Building in Hollywood, CA

David Rifkind

LOS ANGELES, CA – Commercial real estate investment banking firm George Smith Partners has successfully secured financing on behalf of Canadian retail investment firm CormackHill, LP for the recently announced acquisition of the iconic Fred Segal retail property at 8100 Melrose Avenue in Hollywood, California. 

George Smith Partners’ Principal David Rifkind and his team arranged the financing.

 “Retail is in the midst of a generational change that is reshaping financing in this sector,” says Rifkind. “The shift toward a multi-channel strategy that provides customers with a seamless shopping experience whether online or in-store is changing the way retailers view physical space and retail districts.

“ The result is increased caution among lenders, especially those who don’t yet understand exactly how this shift will impact the commercial real estate market moving forward.”

            Rifkind notes that the financing arranged for this acquisition is indicative of a larger trend in the retail market, specifically retailers and retail insiders being willing to make substantial investments in quintessential shopping districts.

            “Brick-and-mortar properties in key high-end shopping destinations such as Melrose are more important than ever to a retailer’s long-term brand,” explains Rifkind, who points to Chanel’s recent acquisitions in SoHo and Beverly Hills, as well as recent Beverly Hills acquisitions by Zara and LVMH to illustrate this trend. 

            “In this case, our client, CormackHill, LP, is extremely knowledgeable in the retail sector and understood the long term value of this irreplaceable location,” he says.  “Our team demonstrated this vision to lenders, and ultimately structured a market leading loan that fit the client’s objectives.”

            George Smith Partners secured the acquisition loan at a sub-3% floating rate with prepayment flexibility.

            Rifkind notes, “Contrary to what many in the industry claim, enlightened players in the retail sector are highly profitable – utilizing big data, efficient sourcing and manufacturing. In fact, retailers adapting to technology integration are operating at higher margins than ever before.  Many retailers will continue to reduce their store counts, concentrating instead on flagship locations.  This trend will continue to define the strongest retail districts for years to come.”

For a complete copy of the company’s news release, please contact:

Jenn Quader / Miki Conant
Brower, Miller & Cole
(949) 955-7940

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