$13,850,000 Ground-Up Condominium Construction Financing to 87% actual LTC (75% LTC with imputed equity)

Rate: 30 day LIBOR + 315
Term: 24 months plus two 6-month extensions
Amortization: Interest only
LTC: 87% (75% with imputed equity)
LTV: 70%
Prepayment: None

George Smith Partners successfully structured senior construction debt for a 29-unit condominium development in the Pico-Robertson neighborhood of Los Angeles. GSP targeted a capital provider who was not only knowledgeable about the location and marketplace, but also comfortable with the Sponsor’s experience and ability to execute the construction project. GSP was able to use the land lift in the entitlements to achieve imputed equity, making the loan 87% of actual cost and 75% LTC using appraised land value. Priced at LIBOR + 3.15%, the two-year term offers two 6 month extensions.

Advisors

Related Financings

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    $4,000,000 80% Construction Financing for Senior Care Facility

    January 16, 2018

    Transaction Description:

    George Smith Partners successfully arranged the $4,000,000 construction financing for a senior home care facility in Northern California. The complex will function as an assisted living facility and is comprised of four contiguous houses accommodating six patients each. California Law states that any care facilities accommodating six patients or less do not require a license to operate. By building four contiguous smaller facilities, the sponsors will realize a greater upside, while still abiding by California regulations. Fixed for two years at 6.5%, the 80% of cost interest only loan will convert to a 5-year mini-perm with a fixed rate of 5.5% and a 30-year amortization. There is no prepayment penalty.

    Challenges:

    To obtain the required leverage to complete the project, it was critical to demonstrate the stabilized value of the property as a commercial care facility rather than as four single family residences. The Sponsors decided to build smaller contiguous care facilities because the California law does not require a license for operations. While this regulation substantially accelerated and simplified the predevelopment process, it also made financing the project significantly more difficult. Conventional lenders could not become comfortable with this subset class of an operationally dependent and niche asset. Because of the complex asset type, the Sponsors requested a mini-perm structure where they had a guaranteed takeout of the construction loan.

    Solution:

    GSP identified a capital source to underwrite the project’s stabilized value as a commercial care facility rather than as four single family residences. In order to provide additional comfort to the Borrower, GSP structured the term to have an automatic mini-perm feature upon stabilization. The tremendous upside in the project, with no prepayment penalty ensured the Sponsors the ability to capture the upside and maintain flexibility.

    Rate: 6.5% to 5.5% at Stabilization
    LTC: 80%
    Term: 2 Years Construction 5 years Mini Perm
    Amortization: Interest Only during Construction, 30 year amortization thereafter
    Guarantee: Recourse
    Prepayment Penalty: None

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    $15,150,000 Financing at 70% Loan to Cost for Beverly Hills SFR Estate Construction

    January 16, 2018

    GSP successfully placed $15,150,000 in first mortgage financing for the construction of a shovel-ready luxury single-family residence in Beverly Hills. The loan funds up to 70% of lender-approved costs and the interest rate floats at 1-Month LIBOR plus 6.2644% (7.50% at closing). The 18-month initial term has two three-month extension options with a 0.375% fee payable per extension, with Interest Only payments during the life of the loan. Lender made one third of the 2.25% loan origination fee due at payoff in order to increase upfront Sponsor funds and offered the potential for Sponsor to take on mezzanine debt at closing subject to minimum equity hurdles. The Canadian Sponsor provided a completion guarantee and a repayment guarantee capped at $5,000,000.

    Rate: 7.50% at closing (1 Month LIBOR + 6.2644%)
    Term: 18 Months
    Amortization: Interest Only
    LTC: 70% of lender approved costs
    Guarantee: Completion Guaranty; Repayment Guaranty capped at $5,000,000
    Lender Fee: 1.5% at closing and 0.75% at payoff

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    $10,000,000 Cash-Out Refinance on a Single Tenant Class A Utah Office Building

    December 13, 2017

    George Smith Partners secured $10,000,000 for the cash-out refinance of a newly constructed Class A single-tenant office building located in Pleasant Grove, Utah. Our Sponsor required a cash-out refinance to pay-off a maturing construction loan for a non-investment grade privately owned tenant. With strong sponsorship and an experienced real estate investor, GSP identified a lender who was is comfortable with 65% loan to value. Fixed for ten years at 4.4%, the loan amortizes for the 25-year term and no prepayment penalty.

    Rate: 4.4%
    Term: 10 year fixed
    Amortization: 25 years
    LTV: 65%
    Prepayment: No prepayment penalty
    Guarantee: Recourse

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    West Los Angeles SFR Acquisition and Construction/Reposition Financing

    December 6, 2017

    George Smith Partners placed the 70% loan-to-cost acquisition and construction financing for a speculative single family residence in West Los Angeles. The sponsor’s plan was to acquire an outdated single family property, and re-develop a 4,200 square foot luxury home. Although this was only the Sponsor’s second speculative single family residence, George Smith Partners was able to emphasize the project’s location and basis to ultimately achieve lender comfort with the requested leverage. Sized to 70% of total cost and 60% of as-completed value, the interest only loan will float at 1.00% over the WSJ Prime for 18 months.

    Rate: Prime + 1.00%
    Term: 18 Months
    LTC: 70%
    Lender Fees: 0.75%
    Guaranty: Recourse

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    $13,850,000 Ground-Up 29 Unit Los Angeles Rental to 75% of Cost

    December 6, 2017

    George Smith Partners secured the $13,850,000 ground-up development loan for a 29-unit multifamily rental property in the Pico-Robertson neighborhood of Los Angeles. GSP targeted a capital provider who was not only knowledgeable about the location and marketplace, but also comfortable with the Sponsor’s experience and ability to execute the construction project. GSP surveyed the project’s risks upfront with the capital provider and structured objective criteria that satisfied both the Sponsor and Lender. Sized to 75% of total costs, the 24 month recourse loan allows for two 6 month options and is priced at 30-day Libor + 3.15%.

    Rate: 30 day LIBOR + 315
    Term: 24 months plus two 6-month extensions
    LTC: 75%
    LTV: 70%
    Lender Fee: 0.60%
    Guarantee: Recourse
    Prepayment: None

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    $60,000,000 Woodland Hills Construction for 241-Units + 34,000 sf Retail

    December 6, 2017

    George Smith Partners arranged $60,000,000 of ground-up construction debt for a mixed-use, luxury multifamily development to build a 241-unit Woodland Hills apartment project that will include 34,139 square feet of retail. GSP sourced a lender comfortable with the Sponsor’s lack of experience, exposure issues and ability to execute on the development plan. This property is located within the Warner Center 2035 Plan, a development blueprint for Warner Center that emphasizes mixed-use and transit-oriented development, walkability, and sustainability. Sized to 70% of cost, the three year term has two – 12 month options that float at 250 basis points over LIBOR.

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    Guarantee: Recourse