Dealmaker: George Smith Partners Secures $27M in Retail Construction Financing

Property illustration courtesy of George Smith Partners

George Smith Partners, Los Angeles, placed $27 million in construction financing to develop a 95% pre-leased grocery-anchored retail center in California’s Inland Empire.

GSP Managing Director & Principal Gary E. Mozer, Senior Vice President Lee Norman, Vice President Tommy Adelson and Analyst Brody Flagg arranged the 36-month, 83.5% loan-to-cost non-recourse loan, which closed at SOFR + 3.45%.

The loan allowed the sponsor to acquire the future retail center’s 15-acre site. GSP said the sponsor plans to develop three-quarters of the site now, hold on to four acres as a second phase and sell a pad site to a future tenant.

Credit tenants including Sprouts, Burlington and Five Below have already committed to lease space in the property. The remaining tenant mix will include an assortment of community-oriented occupiers.

GSP noted capital providers remain hesitant to finance retail construction but said it sourced competitive financing through the development’s strong sponsorship and significant preleasing. “Most importantly, GSP found a lender comfortable with the sponsor’s proposed equity structure, which involved a minimal initial cash contribution followed by additional equity contributions from pad and land sales,” it said.