Rate: 9.0% Fixed
Term: 24 Months w/ Two 12-Month Extensions
Loan to Cost: 80%
Amortization: Interest Only
Lender Fee: 1.0% in/1.0% out
Non-Recourse

Transaction Description: George Smith Partners arranged $19,828,000 in non-recourse acquisition financing for a 6% occupied retail center in Monrovia, California. Despite not having executed leases in place at closing, GSP identified a capital provider who was comfortable funding with LOI’s in hand from strong credit tenants. This loan is structured to allow flexibility for the Sponsor to pursue multiple leasing options and tenant mixes. The 99,334 square foot building is set to undergo light renovations prior to additional tenants taking occupancy. Sized to 80% of total cost (purchase plus capital upgrades), the non-recourse loan is fixed a 9.0% for the 24-month term.

Advisors

Steve Bram Managing Director & Principal / GSP Co-Founder

David R. Pascale, Jr. Senior Vice President

Rate: 9.0% Fixed
Term: 24 Months + Two 6 Month Options
Amortization: Interest Only
Loan-To-Value: 72%
Prepayment Penalty: 12 Month Yield Maintenance
Non-Recourse
Lender Fee: 1.0%

Transaction Description: George Smith Partners placed the 72% loan-to-value bridge refinancing for a two-asset 248 unit Class-C Apartment portfolio in Oklahoma City, Oklahoma. The Subjects were mismanaged and underperforming, precluding permanent lenders from underwriting to the current loan payoff. One asset suffered a sudden drop in occupancy one month prior to this refinance. Additional funds were needed for rehabilitation and cosmetic upgrades to remain competitive in the market. This execution paid off the existing ballooning loan and provided additional cash-equity for capital upgrades. Fixed at 9.0%, the 24 month non-recourse loan was funded in 10 business days. A 1.0% lender origination fee and a 0.9% exit fee are required beyond a 12 month yield maintenance prepayment.

Challenges: A recent short sale for an unrelated property and pending litigation with the existing loan servicer prevented most institutional lenders from underwriting our Sponsor. A sudden decrease in occupancy and noticeable water intrusion highlighted the poor management and differed maintenance.

Solutions: GSP identified a private capital source who was comfortable with the current property condition, understood the upside potential post-rehabilitation and could execute in a very short timeframe; preventing the Borrower from going into default. Litigation exposure was qualified and quantified; the Sponsor demonstrated the financial capacity to mitigate if necessary. Market strength and asset location combined with an executable business plan that replaced current management and clearly mapped out a capital improvement program permitted us to underwrite future occupancy and improved cash flow.

Rate: 6.75% Fixed
Term: 3 years + Two 12-month extensions
Amortization: 24 months interest only; 30-year amortization thereafter
Loan to Cost: 78%
Prepayment: 24-month lockout; open thereafter subject to 1.00% exit fee
Guaranty: Non-recourse
Lender Fee: 1.00%

Transaction Description: George Smith Partners arranged the $5,200,000 first mortgage on a value-add, 1980’s vintage, Houston multifamily asset during a period of extreme volatility in the energy sector. The non-recourse loan provided the borrower 74% of the purchase price plus 100% of future repositioning costs, with interest not paid on renovation funds until drawn. GSP successfully sourced a national balance sheet bridge lender comfortable with funding a high-leverage bridge loan on workforce housing in Houston, Texas despite oil trading below $30/barrel. The three-year bridge loan is fixed at 6.75% eliminating the need for potentially expensive interest rate hedging.

Advisors

Nick Rogers Vice President