On behalf of DJM Capital Partners, George Smith Partners has arranged $101.3M in nonrecourse bridge debt to be used for improvements and repositioning on a 375K SF, 37-acre regional shopping center in La Habra.
The loan replaces existing senior and mezzanine loans on the property, covers closing costs and will fund future capital expenditures, tenant improvements and leasing commission costs, according to George Smith officials.
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The La Habra Market Place at 1641 Imperial Highway is a dual-anchored shopping center with a Sprouts and a Smart & Final.
Other tenants include Petco, Ulta, Hobby Lobby, Ross Dress For Less and LA Fitness, according to George Smith co-founder and principal Steve Bram.
Bram worked on behalf of DJM to arrange $96.6M initial funding and $4.7M in future funding. The future funding will go toward the development of a new retail building that is already pre-leased to Starbucks and Jimmy John's. Some of the funds will go toward a tenant improvement package for a wraparound screen in the Regal Cinema.
"Our team at George Smith Partners was able to draw upon each of these elements to secure maximum leverage for this bridge loan,” Bram said.
George Smith officials said the loan was negotiated at an interest rate of Libor plus 3.2%. The 24-month interest-only loan offers three 12-month options to extend and has an origination fee of 75 basis points.
Yield maintenance is 15 months and is open thereafter. Loan-to-value is 75% currently, dropping to 70% upon property stabilization, and the debt yield for the property is 7.8%.
“La Habra’s retail sector is demonstrating a robust growth trajectory, indicating that strong grocery-anchored centers like this one are a smart investment,” Bram said in the release. “Retail growth is dependent upon residential growth, and residential data also points to positive trends in La Habra."
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