Term: 5 Years
Amortization: 30 Years
Rate: 4.75%
Prepayment Penalty: No Prepay
LTV: 70%
Origination Fee: ½ Point
Guaranty: Recourse
Transaction Description:
George Smith Partners successfully placed the $9,000,000 bridge loan for a 110 unit Single Resident Occupant (SRO) apartment building in Downtown Los Angeles. The loan allowed for the renovation and lease up of a 1920’s vintage building.
Challenge:
Prior to engaging George Smith Partners, the borrower attempted to finance this asset with multiple capital providers, but was unsuccessful due to its SRO use. SROs are essentially studio apartments with a sink and kitchenette, but provide residents with shared bath and kitchen privileges. The lack of kitchens and full baths in the units, along with past operating issues of Hotel SROs, makes them challenging to finance. The borrower also required a return of capital given his length of ownership, management, and continued maintenance of the asset which is typically a challenge on un-stabilized assets.
Solution:
GSP used its extensive market expertise and lender relationships to identify a Southern California based lender with unique bridge loan programs that would allow the un-stabilized project to execute business plan. With an in-depth understanding of this product type and the downtown market, GSP secured a loan for 70% of the current value plus 70% of planned improvements during the loan.
Related Financings
- No related financings.
