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$12,790,000 Multifamily Financing in Odessa, Texas

Rate:5.8%
Term: 10 Years
Amortization: 25 Years
LTV: 75%
Guarantee: Non-recourse with Yield Maintenance
Lender Fee: None

Transaction Description:
George Smith Partners placed the first major four property/228 unit Multifamily portfolio financing in Odessa/Midland, Texas.  The non-recourse, fixed rate loan is priced at 5.8% fixed for 10 years at 75% LTV.

Challenge:
In 2013, Odessa was one of the fastest growing multifamily markets because of the oil/energy industry, even though it is one of the smaller MSAs in the country. In 2014 downward pressure on oil/natural gas caused a downturn in employment and real estate markets. Because of the market volatility only a limited number of lenders felt comfortable with the Odessa market. Before the rebound in 2018, apartment building values had fallen by over 20%.

Solution:
GSP highlighted market potential based on the rebound in housing and employment and was able to identify a capital provider who was comfortable with this tertiary market and its’ recent rebound. Because of GSP’s extensive market knowledge we were able to lock-in a rate of 5.80% fixed for 10 years. GSP did research in the oil market and the MSA of the subject property and was able to prove to the Lender the future stability of the properties’ cashflows.

Related Financings

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    June 15, 2022

    Transaction Description:

    George Smith Partners secured $11,258,000 for the refinance of a seven-property multifamily portfolio in Los Angeles, CA. The loans are non-recourse and fixed at 3.00% for 5 years with 3 years of interest-only payments. The Sponsor received a significant return of equity. The loans went into app about 5 months ago, prior to the recent increase in interest rates. Because of GSP’s strong relationship with the Lender, the Lender held the original 3.00% fixed rate.

    Rate: 3.00% Fixed
    Term: 5 Years
    Amortization: 3 Years Interest-Only
    LTV: 55%
    Prepayment: 3, 2, 1%
    Fee: 0.25%
    Guaranty: Non-Recourse

  • $3,925,000 Non-Recourse 21-Unit Multifamily Acquisition Financing; Los Angeles, CA

    January 18, 2022

    Transaction Description:

    George Smith Partners sourced a $3,925,000 loan for the acquisition of a 21-unit property in West Los Angeles. The loan provided 65% leverage and is fixed at a rate of 3.15% for 3 years. The Lender gave the Borrower full credit for newly signed leases and was able to underwrite to the most recent month’s income. Net operating income was underwritten at the actual note rate, which resulted in higher proceeds compared to other lenders. The Property had some deferred maintenance, but the Lender was willing to have the Borrowers complete it after closing. The 3-year declining prepay fit with the Borrower’s value-add business plan.

    Rate: 3.15%
    Term: 10 years
    Amortization: 3 years Interest Only followed by 30-year amortization
    Prepayment Penalty: 3,2,1,0%
    Guaranty: Non-Recourse

  • $14,370,000 Non-Recourse Bridge Financing for a Multifamily Asset; Los Angeles, CA

    December 8, 2021

    Transaction Description:

    George Smith Partners successfully arranged $14,370,000 in bridge refinancing for a 48-unit garden-style apartment community in the heart of Inglewood, Los Angeles. The Property is located less than 10 minutes from the newly constructed, high-traffic SOFI Stadium – 80,000 seats and home of the Los Angeles Rams and Chargers football teams. The Sponsor plans to renovate several non-vacant units in the building which are scheduled for tenant buyouts over the coming months, along with renovating vacant units to bring rents up to market. There is over a 50% rental upside from the current rent roll. The recapitalization provided future funding for capital expenditures and related overhead costs.

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    Rate: L+355 (0.25% Floor)
    Term: 36 Month Term (2, 12-Month Extension Options)
    Origination/Exit Fee: 1.00% / 0.50%
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  • $37,500,000 Non-Recourse, Stretch Senior Construction Loan for a Mixed-Use OpZone Development; Western States

    September 22, 2021

    Transaction Description:

    George Smith Partners placed a $37,500,000 non-recourse, stretch senior construction loan for a 7-story ground-up development of a mixed-use OpZone Project. When complete, the Project will consist of 151 apartment units (including 14 Live/Work Lofts), approximately 15,000 sf of restaurant space, 10,000 sf of retail, and 12,000 sf of office space. The average apartment size is 730 sf, and most units will have private balconies with unobstructed views of the desert and city.

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    Loan-To-Cost: 75%
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  • $33,000,000 Stretch – Senior Non-Recourse Construction Loan for Ground-Up Luxury Condominiums; Los Altos, CA

    September 15, 2021

    Transaction Description:

    George Smith Partners successfully advised on $33,000,000 in construction financing for a 27- unit luxury condominium project to be built in downtown Los Altos, CA. This high-end offering is the first larger scale project for the newly formed, but individually experienced sponsorship group. The Sponsor has significant historical ground-up experience and will self-perform as the General Contractor. GSP worked through several strategies with the Sponsor including preferred equity, mezzanine debt and an all in one, stretch-senior execution. Ultimately, GSP successfully obtained several highly reliable options for each strategy and the Sponsor selected an integrated full-service construction lender. GSP negotiated a land value contribution in excess of cost and as a result, the land lift allowed the Sponsor to invest less up-front equity than otherwise required to close the transaction.

    The Sponsor projects completion of the project in late 2023. Due to the supply constrained market for the condo units, they expect the project to be completely sold out shortly thereafter.

    Rate: L + 8.25% w/ floor of 9.0%
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  • $45,570,000 Non-Recourse Construction Completion and Inventory Financing for a 77-Unit Residential Condominium Development; Downtown Los Angeles

    July 7, 2021

    Transaction Description:

    George Smith Partners successfully arranged a $45,570,000 construction completion and inventory loan for a mixed-used residential condominium development project in the Little Tokyo neighborhood of Downtown Los Angeles. The non-recourse loan refinanced the existing construction debt, provided additional proceeds to complete the development, and additional term for unit sales. The 77-unit project features 2,400 square feet of ground floor retail and an 8,000 square foot rooftop amenity area. It is slated to deliver in Q2 2022.

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    All Terms Confidential