JV Equity/Pref/Mezz

  • Expand

    $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.

  • Expand

    $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.

  • Expand

    $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.

  • Expand

    $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

  • Expand

    $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.

  • Expand

    $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

  • Expand

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

    November 12, 2014

    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.

  • Expand

    $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.
  • Expand

    $2,517,000 Class A Office Joint Venture Acquisition Equity

    March 6, 2014

    3 – 5 – 14
    Transaction Description: George Smith Partners arranged $2,517,000 of Joint Venture equity for the acquisition of a Southern California Class A office building. The business plan calls for the 39,140 square foot office building to be repositioned and sold upon re-stabilization. This acquisition is part of the Sponsors’ expansion of their 16-property portfolio into the Southern California market. This asset presents an opportunity for significant upside, including major property upgrades and re-organizing top-tier tenants. Equity terms included a 95%/5% capital contribution with a 9% preferred return.
    Advisor:  Malcolm Davies
  • Expand

    $51,075,000 Structured Financing; $38,750,000 Senior Trust Deed and $12,325,000 Mezzanine Loan for Ground-Up Construction of a Class-A Multifamily Asset

    February 27, 2014

    2 – 26 – 14
    Transaction Description:  GSP successfully arranged the combined $51,075,000 of construction financing for a 360 unit Class-A Multifamily project located in Las Vegas, Nevada. The subject is adjacent to Green Valley Ranch and “The District” in Henderson, a mixed-use project that includes a life-style shopping center and resort hotel. This project represents one of the highest quality, most amenitized and dynamic rental projects in Las Vegas.
    Challenge: The Sponsor requested a large construction loan in a market that is not on the preferred list for most capital providers. The projected loan per unit was higher than most completed comps in the market. The Sponsorship was seeking high leverage construction financing which required a combination of a senior and mezzanine loans.
    Solution: GSP demonstrated the considerable experience of the Sponsorship and the singular quality of the location within Green Valley Ranch as compared to other Vegas submarkets, and distinguished this project to justify the high cost per unit. The capital providers understood the value of this location and the Sponsor’s ability to deliver a product that is superior to competing properties in the market. GSP identified a senior lender which had recently negotiated an inter-creditor agreement with a construction mezzanine provider, resulting in a smooth and fast closing process.
    Rate: Terms are confidential
    Advisors: David Rifkind, Omer Ivanir
  • Expand

    $4,700,000 Equity Financing for the Ground-up Development of a 45-Unit Southern California Apartment Building

    December 5, 2013

    12 – 4 – 13
    Transaction Description: GSP successfully arranged $4,700,000 of Joint Venture equity for the ground-up construction of a 45-unit fully entitled transit-oriented apartment development in a prime Southern California infill location.
    Challenge: The three sponsor principals are each highly experienced individuals, however this development is the first in a newly formed partnership entity; the venture has no track record.
    Solution: GSP approached a wide market of capital sources to identify a strategic programmatic equity partner. GSP worked with the investor to develop a structure with an initial low double digit cumulative preferred return, followed by a single hurdle waterfall, and finally provide the sponsor with 70% of the upside over a 17% IRR. This structure will protect investor downside risk while providing the Sponsors with greater upside potential.
  • Expand

    $22,000,000 Joint Venture Equity for the Acquisition of an Industrial Portfolio

    September 19, 2013

    9- 18 – 13
    Transaction Description:  George Smith Partners arranged the Joint Venture equity for the $42,500,000 acquisition of a seven-building industrial portfolio in greater Los Angeles. The existing Trust Deed was assumed due to an onerous pre-payment penalty. The portfolio encompasses 500,000 square feet of improvements. Building uses include big box industrial (24’ clear height with 28’ dock high doors), showroom/flex, and built-out research and development spaces. The high-image buildings have excellent curb appeal. The purchaser is a well-regarded, Los Angeles based investor with institutional investment experience and deep market knowledge. Equity terms included a 96%/4% capital contribution and promotes over an 8% preferred return.
    Challenge: Although 95% leased, these assets are only 88% occupied with over 75% of tenant leases rolling in the next 36 months. The seller had an existing low leverage loan in-place with a significant prepayment penalty and a high mortgage constant due to a 25 year amortization. Assumption of the existing loan resulted in a low cash-on-cash yield and an IRR in the low to mid-teens depending on future market rents and inflation assumptions.
    Solution: GSP documented substantial rent growth in the sub-market and a 4% vacancy rate. We identified a core-plus equity investor who is knowledgeable of the sub-market and quickly became comfortable with the strength of the sponsorship, low cost basis, and risk-adjusted returns. GSP conducted a lender survey to explore replacing the existing debt and prepared a sensitivity analysis to evaluate low cost alternatives. Allowing for all pre-payment costs, we confirmed a loan assumption would provide the lowest cost debt capital.