JV Equity/Pref/Mezz

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    $25,000,000 Construction Mezzanine Financing for Speculative Office in Tempe, Arizona

    October 3, 2018

    Transaction Description:
    George Smith Partners arranged $25,000,000 of Mezzanine construction financing and supported the sponsor in negotiating the $80,500,000 senior financing for a speculative, mixed-use, office and retail project located on North Scottsdale Boulevard and Tempe Town Lake in Tempe, Arizona. This phase of the development includes 250,000 square feet of a 15 story, Class A, high rise office space and 44,000 square feet of lifestyle retail space.

    Challenges:
    Given the perceived historical volatility of the Phoenix and Tempe office markets, and the speculative nature of the business plan, many potential investors were unwilling to take on the risk. Preleasing was critical to the advancement of the Project and to the capital markets. The Senior Lender mitigated the uncertainty by requiring a minimum leasing threshold to be achieved prior to advancing any loan proceeds. However, the local leasing market would not commit to new leases without a committed delivery date.

    Solution:
    The Sponsor, with George Smith Partners’ assistance, was able to develop an alternate structure to the Senior Loan. This allowed the Sponsor to fully engage the equity solution and provide a certain completion date to the Lenders and the tenant market.

    TERMS ARE CONFIDENTIAL

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    $8,600,000 in Acquisition and Development Joint-Venture Equity Financing for 52-Unit Ground-Up Multifamily Development

    July 18, 2018

    GSP successfully secured $8,600,000 in Joint-Venture Equity Financing for the acquisition, pre-development and vertical construction of a 52-unit luxury multifamily apartment complex with 3,000 sf of retail space. The Partnership allowed the Sponsor to acquire the West Los Angeles property, buy-out the existing tenants and fund pre-construction expenses including building permits which are expected to take approximately 12-15 months to obtain. GSP was hired by the Sponsor to provide advisory services throughout the development, including financing the construction loan. After engaging with over seventy groups who focus on providing Joint Venture Equity Financing, GSP was able to identify a West-Coast based family office as an equity finance partner. GSP structured a mutually beneficial, long-term relationship that both the Sponsor and the capital partner stand to gain from.

    ALL TERMS CONFIDENTIAL

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    $58,000,000 of Debt and Joint Venture Equity Financing – $45,000,000 Non-Recourse Acquisition Financing and $13,000,000 of Joint Venture Equity, 680-Unit Atlanta Workforce Multifamily

    October 25, 2017

    GSP successfully arranged a total of $58,000,000 in Acquisition Debt and Joint Venture Equity Financing for the acquisition and reposition of a 1970’s/1980’s vintage work-force housing portfolio consisting of 680-units in an Atlanta submarket. The Financing consisted of $45,000,000 in non-recourse acquisition debt financing and $13,000,000 of joint venture equity (80%/20% co-invest). GSP structured the variable rate debt facility as two uncrossed loans utilizing the Agency green program to achieve favorable leverage of 75% loan-to-value and a reduced interest rate of LIBOR + 2.15%. The Sponsor with their newly formed joint venture equity partnership will implement a value-add reposition strategy by investing a combined $5,500,000 into the two properties, to upgrade property common area amenities, interiors, and implement a green–energy saving initiative. Through the reposition, Sponsor’s cash flow is maximized as the loan is interest only during the initial four-year term.

    Rate: 30-Day LIBOR + 2.15%
    Term: 10 Years
    Amortization: 48 months interest only; 30-year amortization thereafter
    LTV: 75%
    Prepayment: 12-month Lock-out, 1% pre-payment penalty thereafter
    Guarantee: Non-recourse
    Origination Fee: 0.50%

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    $1,100,000 Limited Partner Equity Placement for the Acquisition and Redevelopment of a 14-unit Apartment Building in Long Beach, CA

    August 30, 2017

    Transaction Description
    George Smith Partners secured $1,100,000 in joint venture equity for the acquisition and redevelopment of a 14-unit apartment building in Long Beach, CA. The limited partner equity placement was the first transaction in an ongoing programmatic structure between the Sponsor and the GSP sourced equity provider.

    Challenges
    The challenge was the amount of property level equity investment for each prospective deal was smaller than most investor’s minimum dollar requirement per deal. In addition, the Sponsor did not have a live deal at the time that GSP was engaged on this financing assignment.

    Solution
    GSP leveraged their industry expertise and extensive equity relationships to market the request effectively and secure the right capital for this transaction. In order to garner the interest of equity providers without having a live deal in hand, GSP conveyed the Sponsor’s robust market experience and track record. By showcasing the Sponsor’s growth plan and active pipeline, equity providers became comfortable with discussing potential long term equity relationships. Ultimately, GSP secured an equity provider who understood the strength of the Sponsorship group and believed in their ability to execute the proposed business plan. While negotiating a programmatic structure with the equity provider, the Sponsor went under contract for the stated 14-unit apartment building and subsequently closed on the deal utilizing the equity capital provided by the GSP sourced investor.

    Terms: Confidential

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    $60,000,000 Preferred Equity Financing

    November 12, 2015

    Transaction Description: George Smith Partners arranged the Preferred Equity financing for the development of 1,500 acres/384-Residential lots surrounding a Ben Crenshaw & Bill Coore golf course. Amenities will include Clubhouse, Tennis Courts and Swimming Pools post development. GSP was retained at the end of 2014 to create the strategies necessary to bring in the remaining capitalization needs of the development. The capital arraigned allows the developer to complete the remaining infrastructure, build out of amenities and deliver the residential lots to buyers for vertical construction. While several capital structures could potentially fulfill this capital request, a Preferred Equity financing structure from a Private Equity group offered the most flexibility and favorable terms. Our Sponsor has already embarked on the remaining infrastructure and lots will be ready for sale mid-2016. Sized to 33% of completed value, financing terms are confidential.

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    $5,000,000 Joint Venture Equity Line-of-Credit

    October 29, 2015

    Transaction Description: George Smith Partners successfully placed the $5,000,000 Joint Venture equity facility for a single family home developer focused on Los Angeles’ Small Lot Ordinance. This facility is structured to provide equity on an as-needed basis, functioning similar to a line-of-credit. The Borrower has the option to draw down equity for entitlement, construction, or both. Each transaction is sized individually, and equity can be split on an 80/20 or 90/10 basis, with a waterfall based on performance. Accrual rates on the equity vary and are contingent on risk. A $1,080,000 draw for an 11-unit small lot project located in Northeast Los Angeles has already been exercised. The Sponsor has four additional projects circled in their development pipeline and is actively looking to ramp up their portfolio.

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    $40,000,000 Joint Venture San Diego Luxury Condominium Development

    October 8, 2015

    Transaction Description: George Smith Partners successfully structured the $40,000,000 Joint Venture Equity Financing for ground-up development of The Park, an ultra-luxurious condominium development in the Banker’s Hill section of San Diego. Located adjacent to the world famous Balboa Park – home to many of San Diego’s cultural elements & museums – the project is one of only a few new condominium projects to break ground in San Diego since the market downturn. Boasting large floor plates and 500 square foot terraces, the Subject is designed and intended for very discerning clientele. The project includes direct elevator access to most of the units with views of downtown, San Diego Bay and Balboa Park. Culminating over two years, a significant amount of time was invested with this Developer to create the strategies to complete the capitalization of the project. With this final piece of capital, the project is now fully capitalized and will be embarking on vertical construction. Terms are confidential.

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    $25,000,000 Joint Venture Equity Financing

    July 31, 2015

    Transaction Description: George Smith Partners successfully arraigned the Joint Venture equity financing for a sponsorship group involved in various development strategies. One targeted project is the coastal infill development of luxury single family residences in affluent sea-side neighborhoods.

    Challenge: This type of capital placement is difficult to structure due to the disparate nature and location of all the assets being developed. These transactions are sponsorship driven where the importance of articulating the strengths of the sponsorship group to capital is paramount.

    Solution: Utilizing GSP’s program to introduce sponsorship group’s to institutional sources of capital for various strategies successfully led to the close of this financing. While various other opportunities had been presented over the years, the benefits of gaining a knowledge foothold of the Sponsor’s infrastructure and platform helped achieve the successful and eventual closing with this particular strategy.

    Term: Terms are confidential

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    $25,000,000 Joint Venture Equity Finance, “For-Sale Townhomes”

    June 18, 2015

    Transaction Description: George Smith Partners secured the $25,000,000 Joint Venture Equity finance for the ground-up development of a luxury 168- Unit Dana Point Luxury Townhome project. Malcolm Davies developed an ‘Equity Introduction Program’ to marry the needs of sponsors requiring equity capital with investors prior to a ‘pre-identified’ project to lay groundwork and help mold a mutually agreeable platform. The program objective is to expedite the ‘chase to equity’ on a project level once the asset has been identified. Equity relationships inherently take time to mature. This is the 2nd successful project this particular group has provided capital for this Sponsor. Terms are confidential.

    Challenge: Our sponsorship had a very short escrow period to acquire the development site. The purchase included entitlements for the construction of a 168-Townhome community property.

    Solution: The prior relationship established allowed the Sponsorship to quickly secure the equity and provide the needed capital for the Developer’s luxury townhome project. The new Joint Venture provided all of the needed equity capital for this development opportunity.

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    $13,600,000 Non-Recourse Debt and JV Equity to 97% of Total Capitalization for Ground-Up Multifamily

    March 12, 2015

    Transaction Description: George Smith Partners successfully arranged $13,600,000 in debt and equity financing for the ground-up construction of a 34-unit luxury lifestyle apartment complex. This capitalization represents 97% of total cost for this fully entitled transit-oriented apartment development in a prime Southern California infill location. The non-recourse senior tranche is advanced to 60% of construction cost at traditionally priced bank debt with the balance of capital provided by the Sponsor and Joint Venture Partner. Additional terms and pricing are confidential.

    Non-recourse

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    $11,173,624 Pre-Development Joint-Venture Equity Financing

    November 12, 2014

    Commercial Real Estate Advisory Services –

    Transaction Description: GSP successfully placed the pre-development capital for the construction of a luxury high rise condominium project. The capital allows the Sponsor to acquire the property, demolish the existing office building, finalize construction drawings, open discovery sales center and prepare the site for vertical development. GSP was hired by the Sponsor to provide advisory services throughout the development, including financing the bridge & construction loans. The 62-Unit project will contain 20 three-bedroom residences; 40 two-bedroom with a den, plus two one-bedroom “guest suites” that will be owned by the HOA and available to homeowners for their guests’ use. Units will feature spacious outdoor terraces, elegant open floor plans with gourmet kitchens, and single level living with highly functional designs. Project amenities will include an exclusive 24/7 concierge service, state of the art fitness center, private wine storage, gathering areas with fire pits and terraces, pet facilities, guest suites, and 24-hour security. Terms and structure are confidential.

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    $93,500,000 Ground-Up Non-Recourse Retail Construction Financing to 70% of Total Cost

    June 25, 2014

    Transaction Description: GSP successfully placed a two-tranched combined loan of $93,500,000; consisting of a $56,500,000 Senior Loan and a $37,000,000 Mezz loan from two lenders, for the development of a 191,000 square foot retail center in Huntington Beach, California. Set to open in summer 2015, the project will be a unique retail center, situated on a spectacular site overlooking the iconic Huntington Beach Pier and Pacific Ocean. Pacific City’s architecture features a 2-story open design providing virtually all of the tenant spaces with ocean views. Tenancy will include a mix of national retailers representing iconic California lifestyle brands, several name restaurants, and an Equinox fitness center. The center will also include a marketplace called Lot 579 featuring a mix of distinctive local and regional food artisans in a farmer’s market style setting, similar to the Ferry Building in San Francisco or the Chelsea Market in New York. The retail center will provide a perfect showcase for the retail tenants looking beyond the “mall mentality”. Because of the borrower’s strong experience with development and leasing and the property’s superior location, these lenders structured the financing as a non-recourse loan with minimal preleasing required.

    • Rate: Floating over LIBOR for Senior: Fixed for Mezz
    • Term: 3 Years + Extensions
    • Amort: Interest Only
    • Recourse: Completion Guarantee only.Preleasing: 30% for Senior, None for Mezz.