George Smith Partners Arranges $101.3M Financing for Shopping Center in California

La Habra Marketplace in La Habra

LA HABRA, CALIF. — George Smith Partners has arranged a $101.3 million bridge loan for La Habra Marketplace, a 375,000-square-foot, open-air shopping center in La Habra. Sprouts Farmers Market and Smart & Final anchor the 37-acre property, which is approximately 20 miles southeast of downtown Los Angeles.

Steve Bram of George Smith Partners represented the borrower, DJM Capital Partners Inc., in the transaction. The loan, which includes $96.6 million in initial funding and $4.7 million in future funding, replaces senior and mezzanine loans on the property, and was negotiated at a floating interest rate of LIBOR plus 320 basis points. The lender is a private equity firm with a debt lending platform.

“Dual-anchored by two top-name grocery stores, this is a large property in the midst of a successful repositioning,” says Bram, principal of George Smith Partners. “Led by experienced and well-respected ownership, the center has attracted national credit tenants and is situated in a prime location within the La Habra market. Our team was able to draw upon each of these elements to secure maximum leverage for this bridge loan.”

Additional tenants at the center include Petco, Ulta Beauty, Hobby Lobby, Ross Dress for Less and LA Fitness. The center is 96 percent occupied.

Future funding will go toward a new pad that is pre-leased to Starbucks Coffee and Jimmy John’s Gourmet Sandwiches, as well as a tenant improvement package that will include a lease extension for Regal Cinemas.

The loan covered closing costs and will fund 100 percent of future capital expenditures, tenant improvements and leasing commission costs associated with the final stages of the property’s stabilization.

“La Habra’s retail sector is demonstrating a robust growth trajectory, indicating that strong, grocery-anchored centers like this are a smart investment,” says Bram. “The market saw the introduction of a 17,000-square-foot Aldi prototype store in January 2018 that marked the beginning of that retailer’s expansion in the region, showing that retail fundamentals are strong there.”

— David Cohen


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