$266,780,000 Cash Out Refinance of Los Angeles Multifamily Portfolio; Seven Years Interest Only

Rate: 3.54% Fixed
LTV: 65%
Term: 84 months
Amortization: Interest Only
Guarantee: Non-Recourse
Prepayment Penalty: Yield Maintenance

George Smith Partners successfully placed the refinance of a Los Angeles portfolio consisting of four multifamily properties with 1,359 units. The Sponsor locked-in current interest rates and chose to defease the existing loans to secure the rate and harvest appreciated equity. With energy and water efficiency retrofits, the Sponsor is projected to save 35% in energy and 28% in water costs, per year. As part of a green energy savings program, the Lender gave 18 bps in rate reduction that allowed for a 5% increase in loan proceeds. Sized to 65% of value, the non-recourse loans are fixed for 7 years at 3.54% with interest-only payments.

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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.

    Challenges:
    Many of the buildings have long term residents who have lived at the properties for over a decade. The long term residency coupled with stringent West Hollywood rent control constraints leaves the owner with uncaptured market rents, which ultimately affects the amount of loan proceeds.

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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.

    Rate: 3.70% & 3.90% Fixed for 7 years; 6 Month LIBOR + 2.25% thereafter
    Term: 30 years
    Amortization: 30 Years
    Prepayment Penalty: 5,4,3,2,1
    LTV: 65%
    DCR: 1.15
    Guarantee: Non-Recourse

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    $9,170,000 Cash Out Refinance of Los Angeles Four Building Multifamily Portfolio

    November 8, 2017

    George Smith Partners arranged $9,170,000 refinancing for a portfolio of four multifamily properties in Los Angeles. GSP identified a lender who was comfortable providing a $2,500,000 return of equity to the Sponsor, while executing a strategy for a portfolio refinance that allowed the capital provider to become more aggressive with both rate and proceeds. GSP was able to time the market and lock rate at the ideal moment, achieving the best possible pricing for our Sponsor. This recourse loan represents 75% of the portfolio’s value and has a 30-year term with the first 5 years fixed at 3.85% and resets every 5 years. This loan self-liquidates over the course of the 30-year term.

    Rate: 3.85%
    Term: 30 Years; 5 Years fixed; resets every 5 Years thereafter
    Amortization: 30-Year amortization
    LTV: 75%
    Prepayment: 3,2,1
    Guarantee: Recourse

  • Expand

    $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.

    Rate: 4.15%
    Term: 10 Years
    Amortization: 30 years
    LTV: 55%
    Guarantee: Non-Recourse
    Prepayment: Yield Maintenance
    Origination Fee: Par