Customer successes

Background and Customer Goals

For Vancouver Film Studio, part of The McLean Group, managing its financing was occupying too much time and talent. The company was working with four mortgage lenders, plus equipment leases and bank loans. Studio management wanted to consolidate financing with one lead source so they could concentrate on taking their state-of-the-art film and television studio complex to the next level. The film studio, Canada’s first carbon-neutral production facility, consisted of 11 buildings totaling more than 268,000 square feet and a significant equipment rental inventory.

The GE Capital Real Estate Solution

Business Property supplied a 5-year, $50 million fixed rate loan. A 20-year amortization provided improved near-term cash flow compared with short-term equipment loans. The loan paid off all existing debt, gave the customer a five-year committed deal and provided working capital for the future. The refinancing gave Vancouver Film Studio the freedom and flexibility to focus on its core business and seek growth through the addition of more equipment and soundstages.

Although the deal was structured as a syndication loan from the beginning, GE Capital Real Estate had to approve the loan before looking for potential partners. Moreover, the transaction occurred in an extremely difficult lending environment, with global credit markets in turmoil. Moreover, after GE Capital Real Estate had approved the deal, a prolonged writers strike virtually shut down the North American TV and film industry. This made the sourcing of the syndication partner more complicated.

Given the strike, GE Capital Real Estate and its partners reviewed the financing structure. Both lenders were confident the strike would eventually be settled. To complete the transaction, a small holdback was agreed to by all parties pending the strike’s settlement. The strike was resolved after a few months and, due to the customer’s ability to keep the facility fully booked during the strike, the holdback was released immediately.

Flexibility and Commitment Overcome All Obstacles

GE Capital Real Estate's financing solution involved greater proceeds – with a simpler structure – than competing lenders. The deal was delivered smoothly because GE Capital Real Estate's risk management and credit professionals were involved from the start. The customer also believed that GE’s ownership of NBC-Universal demonstrated a commitment to the TV and film industry.

This deal represents GE Capital Real Estate’s dependability and flexibility. For the deal to close before year-end, all parties agreed to last-minute modifications. The McLean Group was highly pleased with the result and called it a “transformative deal” that positions the Studio for future growth.