$18,000,000 Cash-Out Refinance at 4.47% Fixed for Seven Years, Non-Recourse

Rate: 4.47% Fixed for 7 years; 6 Month LIBOR + 2.25% thereafter
Term: 30 years
Amortization: 30 Years
Prepayment Penalty: 5,5,4,4,3,2,1
LTV: 65%
DCR: 1.15
Guarantee: Non-Recourse
Origination Fees: Par

Transaction Description:
George Smith Partners secured $18,000,000 for the cash-out refinance of two stabilized multifamily buildings in Los Angeles containing a total of 116 units. Constructed in the 1960s these buildings are situated in one of the most sought after areas in Los Angeles and in close proximity to popular restaurants, bars and entertainment. Fixed at 4.47% for seven years, the non-recourse loans float at 6 month LIBOR + 2.25% for the remaining 23-year term. The non-recourse loans are fully amortizing and have a 5,5,4,3,2,1 step down prepayment penalty.

Challenges:
Many of the buildings have long term residents who have lived at the properties for over a decade. The long term residency leaves the owner with dozens of units with uncaptured market rents, ultimately affecting the amount of loan proceeds.

Solution:
GSP worked with a Lender who understood the strength of these assets and was able to underwrite to a 1.15 x DCR at the actual note rate in order to maximize loan proceeds. Both properties also had a handful of recent move ins, which gave the Lender comfort in the future upside of the properties as units continue to turn.

Advisors

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    $35,470,000 Non-Recourse Cash-Out Refinance at 3.70% & 3.90% Fixed for Seven Years

    January 3, 2018

    Transaction Description:
    George Smith Partners secured $35,470,000 for the cash out refinance of a stabilized multifamily portfolio containing 187 units in West Hollywood. Fixed at 3.70% & 3.90% for seven years, the 30 year fully amortizing non-recourse loans float at 6 month LIBOR + 2.25% for the remaining 23-year term and have a 5,4,3,2,1 step down prepayment penalty.

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    GSP sourced a lender who understood the strength of these assets and was able to underwrite to a 1.15x DCR at the actual note rate. The capital provider was amenable to increasing loan proceeds after rate lock and with a handful of recent move-ins, they became comfortable in the future upside of the portfolio as units continue to turn.

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    $9,100,000 Non-Recourse Cash Out Multifamily Refinance @ 4.15% Fixed for Ten Years

    October 4, 2017

    George Smith Partners secured the $9,100,000 non-recourse cash out refinance for 256 multifamily units in a Western States secondary market. Our Sponsor refinanced his existing floating rate loan into new long-term fixed rate financing.  Since initial acquisition, the Borrower commenced on a water conservation program but had yet to complete capital upgrades that would qualify him for green certification.  An interest rate reduction was offered if a completion reserve was set-aside to complete upgrades and secure the green certificate.  Initially estimated at over $100,000, the budget and subsequent reserve was confirmed at $38,000.  A pre-commitment rate lock opportunity was structured for 45 days at no cost, allowing the Borrower to monitor secondary market activity and lock at their discretion.  Fixed for 10 years at 4.15%, the non-recourse loan amortizes over 30 years. All lender fees and third party costs including legal were capped at $13,000.  Future secondary financing will be permitted to 75% of value.

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