Dealmaker: George Smith Partners Secures $41M Silicon Valley Bridge Loan

George Smith Partners, Los Angeles, arranged a high-leverage $41 million bridge loan for a 71,000-square-foot office asset in California’s Silicon Valley.

GSP Principal and Managing Director Malcolm Davies arranged the financing with Vice Presidents Evan Kinne and Zachary Streit and Assistant Vice Presidents Alexander Rossinsky and Rachael Lewis.

Davies said Dutchints Development, Los Altos, Calif., acquired the asset from an institutional seller.

George Smith Partners was able to secure financing for 24 months at an 85 percent loan-to-purchase price, in order to assure accretive equity returns for the client, Kinne said. “This required our team to canvass the market with multiple potential capital stacks, including mezzanine and preferred equity for the appropriate lender who not only understood the market but also recognized the strength of this asset within the market.”

The loan closed within the required 60-day period at a rate of LIBOR plus 5.62 percent. The non-recourse financing remains interest-only for the full 24-month term.

GSP also secured $38.7 million in acquisition financing for a retail assemblage in West Hollywood, Calif. Company Principal and Co-Founder Steve Bram, Senior Vice President Allison Higgins and Assistant Vice President Patrick O’Donnell closed the deal.

The assemblage is currently 100 percent occupied and provides sufficient cash flow to cover all operating and debt service costs. The sponsor purchased the property with plans for a mixed-use condominium/hotel project.

“The lender was able to get comfortable with the entitlement risk due to the sponsor’s strong track record in the market, the irreplaceable location and the ability to generate significant additional revenue through already approved billboards,” Bram said.

The three-year financing sized to 62 percent of as-is loan-to-value included a one-year extension option and a stepdown prepayment. It priced at LIBOR plus 3.75 percent.