George Smith Partners Arranges $16 Million In Construction Financing For Bella Terra Shopping Center
LOS ANGELES, CA – January 10, 2012 – (RealEstateRama) — Commercial real estate investment banking firm George Smith Partners has successfully arranged $16 million in construction financing for DJM Capital Partners, Inc., whose affiliate is the owner of the Bella Terra Shopping Center in Huntington Beach, Calif. according to Principal and Managing Director, Steve Bram and Senior Vice President, David Pascale. The construction loan will allow DJM to create a big box retail pad for new tenant Costco Wholesale Corporation.
Costco signed a 30-year ground lease with DJM requiring the company to provide a construction ready “clean dry pad” on which the retailer will build its new Costco store. The construction included DJM demolishing a 120,000 square-foot former Montgomery Ward’s Department Store, a 80,000 square-foot former Mervyn’s store, as well as adding utility lines, bays for gasoline tanks and raising the retail pad four feet to create a foundation for the new store. DJM is also building a 467 unit apartment complex adjacent to the Bella Terra Shopping Center and Costco site which has been presold to UDR.
“This is the 11th financing we have arranged for DJM over the past 10 years,” explained Bram. “Although both the client and the property are very solid, this particular loan presented a challenge due to the state of the current commercial real estate industry. Construction financing, especially for retail centers, is not easy to achieve in today’s economic climate.”
Pascale added, “We were able to find a lender that understood the stability of both DJM as a company, and the Bella Terra Shopping Center. With the added security that came with the 30-year ground lease from well-known big box retailer Costco, we were not only able to close the construction loan, but we were also able to find a lender willing to offer a competitive interest rate and terms for our client.”
The 15-month term, interest-only, full-recourse construction loan was priced at an interest rate of LIBOR + 3.75 percent with no floor. The construction lender also provided a 5 year mini perm option. However, the client has since forward rate-locked a permanent take-out loan arranged by GSP. This loan has a mid 4 percent interest rate and is scheduled to close in the 2nd quarter of 2012.
DJM Capital Partners, Inc. bought the Bella Terra Shopping Center in 2005 while the property was in the midst of a major renovation. Since DJM’s acquisition, DJM brought The Cheesecake Factory and Whole Foods to the property.
About George Smith Partners
Founded in 1992, George Smith Partners is a leading national real estate investment banking firm that 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. Information about George Smith Partners is located on the company Web site, www.GSPartners.com .
Contact:
Corynne Randel/ Judith Brower
Brower, Miller & Cole
(949) 955-7940
Crandel (at) browermillercole (dot) com
