$4,100,000 Acquisition/Reposition Joint Venture Equity for Distressed Retail

Transaction Description: $4,100,000 Acquisition/Reposition Joint Venture Equity for Distressed Retail GSP arranged the $4,100,000 joint venture equity investment for a portfolio acquisition of 40,000 square feet of distressed retail in Phoenix, Arizona. The sponsor, a repeat GSP client, is a sophisticated investor/developer focused on retail investments with an expert in-house leasing staff. The assets acquired are under-occupied non-credit retail buildings, but well-located and shadow-anchored. The sponsor will accelerate stabilization by offering competitive rents (premised on a reduced cost basis) and by capitalizing tenant improvements and leasing commissions. The transaction is the first of a programmatic joint venture. The investor contributed 90% of the total project capitalization, as the assets will remain unlevered until leasing velocity is demonstrated. Key terms included a 10% pari passu preferred return, a waterfall promote structure thereafter, and management and leasing fees for the sponsor.