Rate: 10%
Term: 12 Months + Two 3 Month Extension
Amortization: Interest Only
LTC: 70-75%
Guaranty: Recourse
Prepayment Penalty: None
Transaction Description:
George Smith Partners secured a total of $14,048,000 cash-out bridge financing for six mid-construction luxury waterfront single family residences in Naples, Florida. The sponsor self-funded the developments to date and sought to use the proceeds to finish construction and recapitalize for other projects.
Challenge:
Our sponsor requested maximum loan proceeds in order to pay off an existing bridge loan that was leveraged at an average of 50-60% LTC, finish the construction, and provide cash-out for other similar developments. Many lenders were not comfortable providing a bridge loan to refinance another bridge loan and reluctant to provide cash-out before the projects were complete. In addition, luxury home development was deemed risky due to its vulnerability in a market downturn.
Solution:
GSP identified a private capital source who was comfortable with the incomplete projects and understood the upside potential at completion. Our Sponsor’s considerable development track record and financial strength further encouraged the lender not to shy away from the challenges. Sized to an average of 70-75% of total cost and 45-55% of as-complete value, the 12-month loan is interest only with no prepayment penalty or yield maintenance.
Related Financings
- No related financings.
