Dealmaker: George Smith Partners Secures $59M for Office Assets

George Smith Partners, Los Angeles, secured $59 million in bridge loans for six California office properties.

GSP Principal/Managing Director Malcolm Davies, Vice Presidents Evan Kinne and Zachary Streit and Assistant Vice Presidents and Rachael Lewis arranged a $41 million bridge loan for a 71,000-square-foot northern California office building.

The 24-month interest-only loan priced at Libor plus 5.62 percent.

Davies said the sponsor required a highly leveraged structure–an 85 percent loan to value ratio–because the building was to be the largest asset in the sponsor’s portfolio. GSP canvassed the market for a lender who not only understood the submarket but also recognized the strength of the asset within that submarket. “This allowed us to push towards 85 percent leverage,” he said. “From the time we started the capital marketing effort, we were in application in approximately three weeks and closed within the short escrow period. This assured a smooth acquisition for our client with a very sophisticated seller.”

In southern California’s Orange County, GSP Senior Vice President Alina Mardesich and Assistant Vice President Joseph Cannizzaro secured an $18 million non-recourse bridge loan secured by six multi-tenant office properties.

Mardesich and Cannizzaro arranged non-recourse, floating-rate bridge debt on an 85-plus percent occupied but under-performing portfolio of multi-tenant office properties. The portfolio included four newly acquired office properties and the retiring of a loan encumbering a fifth office property owned by the client. Loan proceeds will reposition the properties through a strategic renovation and leasing program. In addition, the loan provided the borrower autonomy to execute its value-add strategy and flexibility to distribute operating cash flow along with net sales proceeds resulting from the sale of properties, thereby maximizing the portfolio-level returns.

The three-year loan included two one-year extension options and priced at 3.75 percent plus the one-month Libor rate. It allows interest-only payments during the initial term followed by a 30-year amortization schedule during the extension period.