WEST LOS ANGELES-Champion Development Group has secured $47.5 million in refinancing for its 93,000-sf One West Side retail center on Sawtelle Boulevard. The deal was engineered by Century City-based George Smith Partners.

GSP principal Gary Mozer tells GlobeSt.com that the refinancing enabled Champion to take cash out and secure a lower interest rate "without making an incremental difference in debt service" even though the deal involved defeasance of the old loan.

Champion's new financing is a 12-year, non-recourse deal with a conduit lender that is interest-only for the full term of the loan, which Mozer negotiated along with GSP principal Lee Norman and VP Steve Orchard. Mozer tells GlobeSt.com that in addition to a favorable loan amount and interest rate for the borrower, the refinancing features a structure that was "a great deal" for Champion with regard to recourse provisions, reserve provisions and a number of other terms.

Although many lenders are willing to be competitive on dollar amount and interest rate, Mozer points out, different lenders can vary widely regarding what they will agree to on recourse and reserve provisions and "all types of subtleties" that can make a big difference to a borrower. By marketing the Champion deal broadly, Mozer tells GlobeSt.com, GSP was able to find approximately 35 lenders who quoted on the deal and to single out the one that provided the best combination of dollars, rate and structure.

"There was a broad array of quotes on the deal," that enabled GSP to establish what the market was for dollars and rates on the One West Side property, Mozer explains. "Once you establish what the market is for dollars and rates, you start negotiating on the terms, because there is only so much people can do on dollars and rates," he says.

Although an abundance of capital is still available for financing retail properties, "there is a huge differential" between cash-flowing and non-cash-flowing properties in terms of what lenders are willing to offer, according to Mozer. Although the Champion center occupies a prime location and is fully leased to credit tenants, "the deal was still not without its challenges," he notes.

The property is two-story retail, which lenders can be skittish about, and the two major tenants that occupy more than 80% of the space are in leases that roll over during the term of the loan. However, the property's good location, its having a credit tenant (Linens 'n Things) on the second floor and other factors worked in the borrower's favor.

The One West Side property, which Champion developed in the 1990s, is at 2220 Sawtelle Blvd. in a high-profile location visible from the San Diego Freeway. Besides Linens 'n Things, tenants include Marshalls, Starbucks, Panda Express, Baja Fresh, Quiznos, Cingular Wireless, Champagne French Bakery Café, Robek's Juice and Pasta Pranzo.