$7,000,000 Permanent Refinance for a 53-unit Multifamily Portfolio in West Hollywood

Rate: 4.55% fixed for 7 YRS, then 2.25% over 6-mo LIBOR
Term: 30 years
Amortization: 30 Years
Prepayment Penalty: 5,5,4,4,3,2,1
LTV: 65%
DCR: 1.15
Guarantee: Non-Recourse

Transaction Description:
George Smith Partners secured $7,000,000 for the cash out refinance of three stabilized multifamily buildings in West Hollywood containing a total of 53 units. Constructed in the late 1930s and late 1940s these buildings are situated on one of the most sought after streets in West Hollywood and in close proximity to popular restaurants, bars and entertainment. Fixed at 4.55% for seven years, the non-recourse loan floats at 6 month LIBOR + 2.25% for the remaining 23-year term. The non-recourse loans are fully amortizing 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 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 1.15x DCR at the actual note rate. Our Capital Provider was comfortable with the future upside of the properties as the Sponsor has plans to raise units to market rent as tenants vacate.

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