Development Site

OXNARD, CA-A new $17.2 million loan arranged by George Smith Partners of Century City, CA will pay off a land loan, demolish existing buildings and clear the way for a new 138,000-square-foot Lowe’s Home Improvement store at a mostly vacant and functionally obsolete retail center called Carriage Square. Upside Investments of Calabasas, CA bought the property in 2007 and since then has been getting entitlements and negotiating leases, lease extensions and tenant relocations. The 16-acre center will now be partially demolished and redeveloped to comprise 170,000 square feet of retail space.

George Smith principal and managing director Steve Bram arranged the financing along with GSP senior vice president David Pascale. “The challenge on this loan request was to structure a two-phased construction loan because some of the lender’s diligence items for Phase II will not be completed until early next year,” Bram explained. In addition to paying off the land loan and providing funding to demolish existing buildings, the new financing will enable Upside to build and renovate retail buildings and complete horizontal construction for a pad to be occupied by Lowe’s.

Site Plan

The financing is a 30-month recourse construction loan with two one-year extensions, at a floating rate of Libor + 400 with a 5.5% floor. George Smith Partners has completed two previous construction loans of over $30 million each with this lender in 2010. Bram notes that the financing was the 14th loan that GSP has arranged for Upside Investments.

The new Lowe’s will be the cornerstone of the newly renovated center and will occupy the 138,000-square-foot building on a 20-year ground lease. The remaining tenants are a mix of national chain restaurants and local tenants, including IHOP, 7-11, KFC and Kragen, which will be located on outparcels around Lowe’s.

“At a time in early 2010 when very few new large leases are being signed, Lowe’s stepped up and paid fair market rent for this very desirable location.” Pascale noted. “Lowe’s will be provided with a newly built pad and will then construct its own building, scheduled to open in late 2011.”