Commercial real estate investment banking firm George Smith Partners has successfully arranged a $19.2 million cash-out refinance of an existing bridge loan on Sylmar Towne Center, a grocery-anchored retail center in Los Angeles, according to David Rifkind, principal and managing director. Rifkind was assisted by Eric Hamermesh, senior vice president and Loren Bedolla, assistant vice president.
Sylmar Towne Center is a 150,000-sq-ft retail center including a Ralph’s Grocery, as well as Big Lots, CVS and Kragen Auto Parts.
“Despite the return of the capital markets, non-recourse cash-out retail financing is a very tough deal to make,” explained Rifkind. “We surveyed the permanent debt market including life insurance companies, banks and wall street conduits to identify a lender that would understand the unique characteristics of this asset and provide the funding the client required.”
The non-recourse 10-year loan closed with a 5.39 percent interest rate, 30-year amortization and 71 percent loan-to-value. The borrower required a non-recourse financing structure from the new lender, which would not only provide a return of equity, but also release free and clear an adjacent parcel of land owned by the borrower that had been previously encumbered as collateral.
“Multiple issues that required our expertise also arose during the due diligence period of the transaction. These included tenants in transition, legacy environmental issues, and parking and zoning ambiguities with the city,” added Rifkind. “We worked extensively with all parties to secure this loan which offers a fully-funded lease up and rehab reserve that supports the borrowers' investment objective. We were also able to convince the new lender to release the adjoining parcel from their collateral by showing that it did not contribute to the net cash flow.”
George Smith Partners Completes $19.2 Million Refinancing on a 150,000-sq-ft Retail Center
May 20, 2011