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George Smith Partners Completes $19.2 Million Refinancing of Shopping Center in Los Angeles

Commercial real estate investment banking firm George Smith Partners has arranged a $19.2 million, cash-out refinancing of an existing bridge loan on Sylmar Towne Center, a 150,000 sq. ft. grocery-anchored retail property in Los Angeles.

Sylmar Towne Center includes a Ralph’s grocery store, Big Lots, CVS and Kragen Auto Parts.

The non-recourse, 10-year loan was originated at 71% loan-to-value and carries a 5.39% interest rate with a 30-year amortization schedule.

The undisclosed borrower required a non-recourse financing structure from the new lender that would not only provide a return of equity, but also release free and clear an adjacent parcel of land owned by the borrower that had been previously encumbered as collateral.

“Despite the return of the capital markets, non-recourse, cash-out retail financing is a very tough deal to make,” says David Rifkind, principal and managing director of Los Angeles-based George Smith Partners.

“We surveyed the permanent debt market, including life insurance companies, banks and Wall Street conduits to identify a lender that would understand the unique characteristics of this asset and provide the funding the client required,” adds Rifkind.

Multiple problems arose during the due diligence period of the transaction, including tenants in transition, environmental issues as well as parking and zoning issues.

“We worked extensively with all parties to secure this loan, which offers a fully funded lease-up and rehab reserve that supports the borrowers’ investment objective,” explains Rifkind. “We were also able to convince the new lender to release the adjoining parcel from their collateral by showing that it did not contribute to the net cash flow.”

Assisting Rifkind in the deal announced were Senior Vice President Eric Hamermesh and Assistant Vice President Loren Bedolla of George Smith Partners.

Founded in 1992, George Smith Partners specializes in arranging financing for commercial and residential properties, including acquisition, construction, bridge and permanent loans, as well as mezzanine loans, highly leveraged participating loans and joint venture equity.
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