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$7,000,000 Non-Recourse Acquisition & Predevelopment Financing; 14-Day Close

Rate: 10% Fixed
Term: 18-months plus two six-month extension options
Amortization: Interest only
Loan to Purchase Price: 67%
Non-Recourse
Prepayment: Six-month yield maintenance

Transaction Description: George Smith Partners arranged the $7,000,000 non-recourse acquisition loan for the acquisition of a 22,150 square foot parcel located along a major thoroughfare in West Los Angeles, California. Currently improved with a 5,275 square foot retail building occupied by a single tenant, the lender structured an interest reserve as in-place cash flow is inadequate to cover debt service. This loan provides our Sponsor with financing during the entitlement period and will be taken out with a construction loan upon receipt of entitlements for the 15,000 square foot retail redevelopment. Funded to $316 per square foot for the land; $1,327 per square foot improved, GSP sourced a capital provider comfortable with the high loan per square foot on the existing collateral due to the project’s streamlined “by-right” entitlement process and tight market occupancy. Sized to 67% of purchase price, the two-week non-recourse quick close acquisition loan priced at 10% fixed for the 18-month loan duration.

Advisors

Related Financings

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    Transaction Description: George Smith Partners arranged the $2,680,000 non-recourse acquisition loan on a fully entitled 16 acre parcel of land in North San Diego County. Our Sponsor acquired the land to re-entitle for a higher density housing development for re-sale to a homebuilder. The loan was sized to 65% of purchase, priced at 7.75% over Prime.

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    Rate: Prime + 7.75%
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  • $3,400,000 Four-Parcel Acquisition & Recapitalization @ L+300 to 80% LTC

    February 3, 2016

    Transaction Description: George Smith Partners successfully placed acquisition & recapitalization financing for a four-parcel land assemblage in the Koreatown area of Los Angeles. Our Sponsor will construct a 90-unit multifamily project on the fully entitled site. All four parcels are currently improved with duplexes or four-plexes. Two of the four subject parcels are owned free and clear, and the additional two were under contract for purchase. Market research identified a strong and improving employment and demographic trajectory of the area. Underwriting modeled the land basis in terms of loan per buildable unit. Recent land sale comparables with similar entitlements produced sufficient value for the lender to qualify the value to justify this level of leverage. Sized to 80% of total capitalization, no additional cash equity was required to complete the purchase. Priced at LIBOR plus 300, there is no interest rate floor netting an all-in coupon under 4.0%.

    Rate: LIBOR + 300
    Lender Fee: Par
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    Recourse: Personal Repayment Guarantee
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  • 60% of Cost Purchase of Unentitled Land Assemblage

    August 27, 2015

    Transaction Description: George Smith Partners successfully arranged $1,680,000 for the acquisition of a two parcel assemblage in the Koreatown area of Los Angeles. The Sponsor is purchasing the land with the intention to entitle and build a 53-unit multi-family residential community. Given most capital providers’ standings on unentitled land, our Borrower required certainty of execution with this quick-close purchase. GSP identified a Los Angeles non-institutional fund familiar with this in-fill location and mapped out market trades for unentitled land while providing comps per unit for a traditional construction debt execution exit. Fixed at 8.9% for one year, this recourse loan has two options to extend should the Sponsor be unable to secure his permits with the first year.

    Rate: 8.9%
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  • $1,900,000 Acquisition Unentitled Land & $600,000 Cash-Out Triplex Refinance

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  • $3,600,000 Acquisition for Unentitled Land to 80% of Purchase

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