Rate: 4.06%
Term: 7 Years
Amortization: 30 Years
LTV: 80%
Recourse: No
Prepayment: Yield Maintenance

Transaction Description: George Smith Partners successfully closed a $27,100,000, 10-year fixed-rate loan on 11 apartment buildings in Baldwin Hills, California. Several of the assets were too small to finance individually so all properties were cross-collateralized in order to achieve the best pricing across all properties. Baldwin Hills is an improving neighborhood with rapidly increasing values which allowed the lender to maximize the loan amount. The lender was able to push proceeds to provide a return of equity to the Sponsors and pay for future seismic retrofits. The 4.06% coupon was locked at application for 60 days at no cost. The non-recourse loan is fixed for seven years with a 30 year amortization.

Advisors

Steve Bram Managing Director & Principal / GSP Co-Founder

Allison Higgins Senior Vice President

Rate: 3.158%
Lender Fee: Par
Term: 7 Years
Amort: 5 Years IO
Recourse: No
LTV: 55.0%

Transaction Description: George Smith Partners successfully placed the permanent refinance for a 34-unit Class A multi-family structure in the Westwood neighborhood of Los Angeles, south of Santa Monica Boulevard. The Sponsor constructed the property in 2006, and still had time prior to his existing loan opening to prepayment without penalty. The non-recourse loan was locked at application for 60 days at no cost or spread increase. Fixed for seven years at 3.158%, the first five years of the loan are interest only.

Challenge: Our Sponsor believed that interest rates were historically low and would climb prior to his loan opening to pre-payment without penalty. The Borrower wanted to understand at what point the prepayment/rate equation would be most beneficial to lock in current rates.

Solution: GSP produced an analysis that proposed current and future interest rate scenarios to determine potential costs of refinancing versus accepting interest rate risk or incurring the additional cost of an extended rate lock. An inflection point was found to exist by securing an early rate lock that allowed the prepayment to decrease over the two months required to complete the loan due diligence. The capital provider would have extended their rate lock beyond the 60 days (up to 9 months) at an additional cost of 3 basis points in spread. Our Sponsor benefited by locking in a low rate at application while his prepayment penalty amortized down during processing.

Rate: Prime + 1.0% w/4.5% Floor
LTC: 75%
Term: 2 Years
Amort: 30 Years
Lender Fee: 0.5%

Transaction Description: George Smith Partners successfully placed an acquisition bridge loan for the rehabilitation and renovation of 22 multifamily rental units in Koreatown, Los Angeles. Funding included $800,000 of future capital improvements for the planned rehab of units. Sized to future stabilized value, this loan allows for an increase in debt coverage ratios and debt yields as the property continues to improve financially. Floating over Prime plus 1.0%, the two year loan was sized to 75% of total capitalization.