Monday, March 13, 2017

George Smith Partners Secures $30 Million in Refinancing for Grocery-Anchored Shopping Center in Greater Los Angeles, CA

Plaza de Hacienda, La Puente Submarket, Los Angeles, CA

Shahin Yazdi
LOS ANGELES, CA (March 13, 2017) – Commercial investment banking firm George Smith Partners has secured $30 million in refinancing for Plaza de Hacienda, a 156,000 square-foot grocery-anchored retail center in the La Puente submarket of Los Angeles. 

The financing was arranged by George Smith Partners Principal and Managing Director Shahin Yazdi.

The property is located at 1735-1869 N. Hacienda Boulevard in La Puente, California.

“Financing for shopping centers continues to generate mixed responses from lenders,” says Yazdi. “While some lenders are demonstrating strong appetite for retail, others are proceeding with caution and being more conservative in their underwriting.”

George Smith Partners was successful in attracting competitive refinancing for this center, which is anchored by Food 4 Less, and boasts national and credit tenants such as Ross, Big 5 and Jack in the Box, among others.

“Well-located centers with solid financials and anchor tenants in place can still attract strong lender interest,” Yazdi says.  “The fact is, there are ample sources of capital available to finance these investments, provided they are presented to lenders correctly.”

The sponsor, Optimus Properties, LLC, a privately held real estate investment firm that owns a diverse portfolio of commercial assets, had requested a fixed-rate loan with the goal of refinancing its maturing loan for this regional retail center.

Kamyar Shabani
“With the wave of CMBS loans set to mature this year, many borrowers are looking to refinance.  It’s prudent to seek long-term fixed-rate loans in order to lock in low rates now, prior to future interest rate increases,” notes Yazdi.

“The challenge with this deal, however, was that despite the strength of the center’s tenant mix, many of the anchor tenants had leases that were set to expire in the next several years. As a result, many lenders were hesitant to be aggressive with the debt yield.”

Kamyar Shabani, Principal and Co-Founder of Optimus Properties, explains, “With our existing loan set to mature, we knew that we needed a competitive financing structure that would keep us leveraged on the property.  

"By communicating the strength of our investment strategy, George Smith Partners delivered an optimal financing solution that will allow us to own and operate this center as a strong cash-flowing asset for years to come.”

“Ultimately, we were successful in meeting the borrower’s objectives in cashing out as much equity as possible for future investments, while also maintaining great cash flow for the borrower by negotiating five years of interest only payments,” confirms Yazdi. “Our ability to close this deal within 40 days from the time of application speaks to the strength of our innovative structuring expertise, as well as our deep lender relationships.”

The sponsor plans to perform capital improvements as needed, and maintain the retail center as a high profile, cash-flowing asset.

            George Smith Partners secured the $30 million loan from a CMBS lender. The ten-year loan was structured with a loan-to-value of 65 percent with a five-year interest-only period, followed by an amortization of 30 years. The rate was fixed at the 10 year swap plus 2.53% with a 1.23 debt coverage ratio and 7.75% debt yield.

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

Miki Conant / Katie Kea
Brower, Miller & Cole
(949) 955-7940

No comments: