Deal at a Glance
| Loan Amount | $1,300,000 |
| Property | Retail building |
| Location | La Jolla, California |
| Transaction | Refinance |
| Lender | a bank |
| Rate | 3.27% fixed for 60 months, maximum relationship discounts applied |
| Amortization | 25 years (300 months) |
| Term | 60 months (84 and 120-month options also available) |
| Prepayment Penalty | 5%/4%/3%/2%/1% (years 1-5) |
| Loan Fee | 0.25% |
| Collateral | First deed of trust, assignment of rents |
| Borrower | Family trust |
| Guaranty | Personal guaranty of the trustees |
| Closed | Q3/Q4 2021 |
The Deal That Walked in the Door
We are Commercial Lending Solutions, a commercial mortgage brokerage based in Los Angeles, and this refinance brought us a family ownership group holding a retail building in La Jolla, CA through a family trust. The trustees wanted to refinance the property with a bank willing to price competitively in exchange for a broader banking relationship, rather than treating the loan as a purely transactional refinance. Commercial Lending Solutions specializes in retail property refinancing and relationship-priced permanent financing for family trust owners across California and nationwide.
La Jolla, California's retail corridor carries strong underlying real estate fundamentals, and a bank willing to extend relationship-based pricing on a smaller-balance commercial loan made this refinance an efficient fit for a family trust looking to lock in long-term fixed-rate certainty.
What Made It Hard
- A rate quote that moved weekly until funding. With the proposal explicitly noting that rates would change weekly until the loan actually funded, the trustees had to move through underwriting efficiently to lock in the most favorable pricing available rather than risk a less favorable re-quote.
- Structuring the loan around a family trust borrower. With the family trust as the named borrower and the individual trustees standing behind it as guarantors, the underwriting had to account for both the trust's standing and the trustees' personal financial picture.
- Qualifying for the maximum relationship discount. Getting the most favorable quoted rate required establishing the kind of banking relationship, including an automatic debit account for loan payments, that the bank's discount pricing was actually built around.
"Rates that reprice weekly reward speed, not patience. Once we knew the maximum relationship discount was on the table, the priority became moving the trustees' paperwork through underwriting fast enough to actually lock that pricing before the next weekly re-quote."
How We Ran the Process
Trevor Damyan, a California-licensed real estate broker (CA DRE 02244836), placed the refinance with a bank, with the signed letter of interest dated August 26, 2021:
- $1,300,000 secured by a first deed of trust and assignment of rents on the La Jolla retail property
- 3.27% fixed for 60 months, reflecting the maximum relationship discounts available, with 84- and 120-month term options also offered at the time of the proposal
- A 25-year (300-month) amortization schedule, with the loan structured as a standard commercial real estate refinance
- A declining prepayment penalty of 5% in year one, 4% in year two, 3% in year three, 2% in year four, and 1% in year five
- A 0.25% loan fee, with the borrower responsible for reimbursing the bank's out-of-pocket appraisal, title, and environmental review expenses
- The family trust as borrower, with the individual trustees providing personal guaranties on the loan
- A required automatic debit account established with the bank for monthly principal and interest payments
- Standard closing conditions: a completed loan application package, satisfactory review of the preliminary title report, credit investigation on borrower and guarantors, appraisal report, and environmental report
The refinance closed with the maximum relationship discount locked in, giving the family trust a long-term fixed-rate facility on the La Jolla retail property.
Why We Won This One
Moving efficiently through underwriting to capture the maximum relationship discount, rather than letting the process drag while the bank's weekly rate updates worked against the borrower, is what protected this loan's pricing. With the proposal explicit that rates would change weekly until funding, keeping the application package moving without delay locked in the most favorable terms available at signing.
Structuring the loan correctly around the family trust as borrower with the trustees as personal guarantors also mattered on a deal this size. Getting the entity documentation and guaranty structure right from the outset avoided any late-stage confusion about who was actually standing behind the loan, keeping the closing straightforward on a smaller-balance commercial refinance.
Is This Structure Right for Your Deal?
If you hold commercial real estate in a family trust and want to refinance with a bank offering relationship-based pricing, establishing that banking relationship upfront can meaningfully improve your rate. We arrange retail property financing and permanent loans from a network of more than 1,000 capital sources.
Apply for financing or call us at 310.708.0690 to talk through your refinance.
This is one of 46 closings we have arranged across California from our Los Angeles office. See our California commercial financing page, or browse all California closed deals.
Trevor Damyan is a commercial mortgage broker at Commercial Lending Solutions with a background in structured finance at CBRE and Marcus and Millichap Capital Corporation. He specializes in bridge loans, construction financing, SBA programs, DSCR loans, and complex capital structures for investors and developers across all 50 states.
View full profile →