$13,369,000 Acquisition and Expansion Loan: 82-Site RV Park

Rate: Prime + 1%
Term: 5 Years
Amortization: Interest Only for 24 Months
Loan to Cost: 65%
Guarantee: Partial Recourse with Burn-Off

George Smith Partners successfully closed an acquisition and expansion loan for an 82-site RV park on the Central California Coast. There are few RV parks west of Highway 1 on the Pacific Coast, and fewer yet that include expansion space. The Sponsor plans to add 24 sites in the coming months to the 100% transient property. The loan included proceeds for the Sponsor to place bungalow-type model home units on several sites. This allows travelers without RV’s to “glamp” at the beautiful and well-located park.

GSP’s mandate was to source a lender who not only had the ability to execute in a timely fashion, but one who recognized the value in the excellent location and rare nature of the park. Furthermore, the Sponsor required a lender who understood their vision for creating a one-of-a-kind and of-the-moment guest experience.

The selected lender was able to recognize the unique value proposition of the property and the strong sponsorship involved in the project.


Related Financings

  • Expand

    $34,000,000 Dallas Multifamily Acquisition Fixed at 5.15% w/Full Term Interest Only

    January 23, 2019

    Transaction Description:

    George Smith Partners secured a $34,000,000 permanent loan for the acquisition of a 273 unit Class A multifamily property in Dallas, TX. The 10 year loan is priced at 5.15% and fixed for ten years, with full term interest only. The Borrower executed their purchase and sale agreement in October 2018 as part of a 1031 exchange. While in due diligence the cash flow declined due largely to new construction coming on-line. In addition property taxes were re-assessed at a higher rate. GSP worked with the lender as well as the rating agencies to demonstrate the historical occupancy (95%+) and mitigate the loss in net cash flow from the rise in operating costs. The borrower was able to rate lock at an all-in rate less than applied for, with full proceeds, during the last week of 2018. The transaction closed once business commenced in full in 2019.

    Rate: 5.15% fixed
    Term: 10 years
    Amortization: 10 years Interest Only
    Prepayment Penalty: Defeasance
    LTV: 65%
    DCR: 1.4x
    Debt Yield: 7.75%

  • Expand

    $5,060,000 Permanent 19 Unit Multifamily Acquisition Loan; 5 years Interest Only

    January 24, 2018

    Transaction Description:
    George Smith Partners secured $5,060,000 of non-recourse acquisition debt for the purchase of a 19-unit multifamily property in Los Angeles. The loan has interest only payments at a fixed rate of 3.92% for the first 5 years, before switching to a 30-year amortization. The lender provided non-recourse execution and a short prepayment penalty structure.

    The property is located in a prime Los Angeles location, but low tenant turnover had resulted in one third of the tenants paying less than 50% of market rent. As a result, the property was income constrained. Many lenders stressed their cash flow at a rate higher than their current note rate, resulting in limited proceeds. The seller had upgraded several units and classified the cost as an operating expense on historical P&Ls. The property had a minor deferred maintenance issue that created some uncertainty during the appraisal inspection.

    GSP identified a Capital Provider that sized their proceeds at the actual note rate, rather than a stressed underwriting rate. The selected lender was also able to underwrite down to a 1.15 DCR, compared to the 1.20 constraint offered by other institutional providers. This resulted in considerably higher proceeds. Invoices were obtained for the unit upgrades which allowed the exact amount of capital expenditures to be deducted from operating expenses. It was confirmed that the deferred maintenance issue was disclosed to potential buyers during the bidding process, thus establishing that the sale price was inclusive of the cost of the repair.

    Rate: 3.92% fixed for 5 years; floating at 6 month LIBOR + 2.25%
    Term: 30 years
    Amortization: 30 years
    LTC: 65%
    Interest Only: 5 years
    Prepayment Penalty: 3, 1
    Origination Fees: Par
    Guarantee: Non-Recourse

  • Expand

    $12,500,000 Non-Recourse Acquisition Financing to Acquire Land in Koreatown

    December 20, 2017

    George Smith Partners arranged $12,500,000 in non-recourse acquisition debt secured by both a 58,237 sf lot containing a K-12 Prep School and a 29,400 sf lot containing a largely vacant retail center. The properties are situated in the Koreatown and Chinatown district of Los Angeles respectively. GSP targeted a capital provider comfortable with foreign sponsorship, proposed entitlements, religious relationship of the property, quick closing timeline, and the ability to focus on the future value of the land parcel. Sized to 45% of the $28MM total purchase price and fixed at 8.50% on an interest only basis, the non-resource facility has an initial term of 18 months followed by an optional 6-month extension. The capital provider closed the loan in 14 business days, allowing the Sponsor to close on the property quickly given the sellers strict timeline. All prepayment penalties were waved, allowing the Sponsor the flexibility to refinance at a lower rate once entitlements or construction financing are obtained.

    Rate: 8.50%
    Term: 18 Months + One 6 Month Extension
    Amortization: Interest Only
    LTV: (Purchase Price): 45%
    Guarantee: Non-Recourse
    Lender Fee: 1%