GSP Arranges Financing for 3rd St. Promenade Asset
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SANTA MONICA, CA-GlobeSt.com has learned exclusively that George Smith Partners has arranged a $7-million full cash-out loan for a private client on a 7,500-square-foot property on Santa Monica’s Third Street Promenade. The building is currently occupied by a Converse retail store, the brand’s first West Coast location.
GSP secured a 15-year fixed loan with a 30-year amortization at 4.98% interest. Rate lock was honored for 160 days, and a majority of the loan term provides for a step-down prepayment feature. Barbara Tenzer of Tenzer Commercial represented the owner in working with GSP to secure the loan.
According to Marc Schillinger, VP of GSP, “Third Street Promenade has been evolving into Southern California’s premier retail and entertainment destination, and as such, values and rents on a per-square-foot basis have become among the highest in Southern California.”
Schillinger added in a prepared statement that the high loan-per-square-foot of $933 was “a challenge when finding the appropriate lender for our client, as lenders are often unaccustomed to this high-value market and get nervous at such a high loan-per-square-foot price.”
The firm was responsible for securing a loan with the longest term and lowest rate possible, while also ensuring that the financing would provide for complete prepayment flexibility. An additional challenge in the transaction was that the fixed-rate term the client was seeking exceeded Converse’s lease term by six years.
“In order to meet these requirements, it was essential for our team to present the loan request in a realistic manner that met the requirements of the marketplace, while also meeting each of our client’s needs for the loan,” said Schillinger. “The key to success is to know which lenders have this capability.”
Schillinger also acknowledged that this is a very competitive marketplace for capital, adding that lenders can no longer win deals by competing on rate alone. “In today’s market, lenders need to tailor other important loan features to the needs of the borrower.”
As GlobeSt.com previously reported, in November George Smith Partners arranged $3.965 million in financing on behalf of LocalConstruct for the acquisition of Fillmore Ridge Apartments, a 114-unit apartment community at 3210 North Chestnut St. in Colorado Springs, CO. The loan, which was arranged by GSP’s VP Jonathan Lee and analyst Shine Cheng, was a non-recourse, $3.965-million acquisition loan that closed with an interest rate of 3.86% for 10 years, with a 30-year amortization and a yield maintenance prepayment.
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