Dealmaker: George Smith Partners Closes Two Bridge Loans

George Smith Partners, Los Angeles, arranged $32.9 million in bridge financing for office properties in Denver, Colo. and Decatur, Ga. 

GSP Principal Malcolm Davies, Vice President Kyle Henrickson and Assistant Vice President Teddy Stutz arranged a $25.3 million bridge loan for an unfinished 78,000-square-foot office building in downtown Denver’s Platte River submarket. 

“Per the purchase contract, the newly constructed office building would be delivered as a warm shell, with an extensive tenant improvement build-out of $130 per square foot still to be completed,” Davies said. “With 14 months of no cash flow and the tenant improvement build-out to be completed for a startup tenant, the financial market struggled to underwrite the business plan.”

But the sponsor possessed an executed lease for 65 percent of the building at closing with an option to take the remainder of the space. GSP documented the tenants’ capitalization and national expansion plan. Floating at LIBOR plus 475 basis points, the non-recourse loan carries a three-year term before options.

GSP Senior Vice President Gilda Rivera and Assistant Vice President Johnny Nhoung arranged $7.9 million for a 60 percent occupied medical office building in Decatur, Ga. They placed the bridge refinance with a private capital source. 

The 33,685-square-foot structure required an interim bridge loan to finish outstanding tenant improvements, pay off property liens and stabilize the asset for permanent financing. The existing loan had matured and the borrower fell into technical default and started paying default interest rates. Tenant improvement costs exceeded budget, requiring additional proceeds to complete the build-out prior to occupancy.

GSP sized the six-month fixed-rate loan to 72 percent of as-is value. The interest-only financing bears interest at 11 percent.