$8,700,000 Non-Recourse Predevelopment Land Loan in Los Angeles’s Hollywood Neighborhood; 14-Day Close

Transaction Description:

George Smith Partners successfully placed $6,800,000 in land financing for a 5-acre site to be developed into 42 single family detached homes in Los Angeles, CA. The Project had already received most entitlements for the infill, hilltop site located in an up-and-coming neighborhood. Furthermore, the Sponsor needed to pay off multiple loan balances and receive additional funding to complete engineering to receive a final map.
Backed by experienced Sponsorship with extremely well-located collateral, GSP sourced financing that funded at approval of tentative map with highly favorable leverage and a closing timeline of less than three weeks.

Transaction Description:

George Smith Partners secured $16,500,000 in bridge financing for a five-parcel land portfolio located in Los Angeles, CA. The five individual parcels are entitled (one in process of entitlements) for co-living developments totaling 211 units and 879 beds. The non-recourse loan refinanced existing debt, while providing for permitting and carry costs prior to development, with four assets slated to break ground in early 2021, and the fifth in late 2022. The loan is sized at approximately 50% LTC on a 6.90% fixed rate, non-recourse, with a 12-month term. The loan did not require an interest reserve.

Given COVID related permitting delays and perceived impacts to the co-living product type brought by the pandemic, GSP was able to identify a lender that understood the stability of the submarkets for future development and the resilience and growth of co-living over the next several years. The infill development sites, and high-density entitlements provide strong value to the collateral base for this financing. The loan closed within five weeks of term sheet execution (including the holiday and New Year’s break).

George Smith Partners secured financing for a non-recourse $3,400,000 covered land loan for a hotel development in Los Angeles. There is currently an existing building on the Property which allowed GSP to structure a highly leveraged land loan. Usually land loans are limited to 50% of the purchase price, but GSP’s strong relationships and experience allowed for the value of the current improvements to achieve much higher leverage.