Dealmaker: George Smith Partners Arranges $30M for Hotel, Office Assets

George Smith Partners, Los Angeles, secured $30.4 million in acquisition financing for a Corona, Calif. hotel and an office tower in San Fernando, Calif.

In Corona, GSP Senior Vice President Gilda Rivera and Assistant Vice President Irene Liu secured $15 million in commercial mortgage-backed securities financing for a 130-Key Marriott select-service hotel. The 10-year fixed-rate loan priced at 4.79 percent with a 30-year amortization schedule.

The sponsor sought high-leverage financing to minimize the cash downpayment required at closing. GSP sourced a lender willing to provide a 72 percent loan-to-value ratio; higher than most hotel lenders on a non-recourse loan. GSP also pre-negotiated with the lender to waive its $7,500 application fee and cap its legal fees at $35,000.

In the San Fernando Valley, GSP Principals Shahin Yazdi and Jonathan Lee, Senior Vice Presidents David Stepanchak and Olga Alworth, Vice Presidents Matthew Kirisits and Paul Monsen and Assistant Vice President Samuel Sarshar arranged $15.4 million in non-recourse financing for a multi-tenant office tower.

The property has more than 40 tenants and many leases expiring within three years. A major tenant recently moved out, resulting in a 10 percent vacancy rate. To secure financing, GSP demonstrated to lenders that the property’s occupancy rate historically exceeded 95 percent in a strong local market. This made the lender comfortable with the near-term lease expirations and the temporary vacancy increase. Additionally, while the loan was in application, the sponsors signed a new lease to increase occupancy and the lender did not require seasoning on the new lease. The lender also agreed to consider cell tower leasing and parking income based on historical figures for those income sources.

The 10-year, full-term interest-only loan closed at 3.68 percent.