SAN DIEGO, CA—Investment banking firm George Smith Partners has successfully arranged $12.7 million in pre-development financing on behalf of its client, San Diego-based Zephyr Partners, who plan to develop a full city block project in downtown San Diego.
Plans include two 32-story towers comprised of both residential and retail space, according to George Smith Partners' principal Malcolm Davies.
“This development site is downtown San Diego's largest land acquisition this year, and is poised to be one of the first downtown condo projects to move forward to construction,” explained Davies.
Zephyr Partners acquired the full city block property located between Seventh Avenue, Eighth Avenue, Broadway and C Street, for $21.1 million on June 13, according to Davies.
“The site is located in a fantastic sector of downtown that is well-positioned for redevelopment,” Davies said.
Plans for the development include 700 residential units and 60,000 square feet of anchored retail space. A leased in-line retail center currently occupies the site, and Davies noted that the land is not yet fully entitled.
“Obtaining financing for a development that does not yet have final entitlements in place presented a challenge for our team,” explained Davies. “To combat this issue, we worked to educate lenders regarding downtown San Diego's master EIR and Zephyr Partners' vast experience in San Diego developments, demonstrating the firm's strength as both a borrower and a developer.”
According to Davies, Zephyr Partners has developed numerous San Diego residential projects in recent years, including single family homes, condominium projects, and multifamily communities.
“Drawing upon our extensive network of lenders, we were able to identify a lender who understood the value of and demand for a development of this magnitude in downtown San Diego, and was willing to provide financing even in the absence of final entitlements,” he said.
George Smith Partners arranged an interest-only loan with a large interest reserve, priced at 6.5% for two years with a one year extension.
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David Phillips
David Phillips is a Chicago-based freelance writer and consultant with more than 20 years experience in business and community news. He also has extensive reporting experience in the food manufacturing industry for national trade publications.
