Rate: 4.31%
LTC: 75%
Term: 12 Years
Amortization: 9 Years IO; 30 Years thereafter
Non-Recourse
Prepayment: Yield Maintenance
Lender Fee: Par

Transaction Description

George Smith Partners placed the $41,000,000 acquisition debt of a Class A 300 unit multifamily in Colorado Springs, Colorado.  At the time of inspection, only one unit was available for lease. With the US Air Force Academy and Lockheed Martin located in Colorado Springs, employment drivers include a notable concentration of military and military related jobs. Lender concerns over the potential of transitional employee postings was mitigated with a long historical occupancy above 95% and a resident concentration of less than 6% of active duty personnel. Sized to 75% of the purchase price, the full coupon (index + spread) was locked just prior to the run up in Treasuries. Fixed for 12 years at 4.31%, the first nine years of the loan are Interest Only before rolling into a 30 year amortization schedule.  The non-recourse loan carries a yield maintenance prepayment penalty but does allow for future advancements subject to the current LTV and debt coverage constraints.

Rate: Prime + 1 %
LTV: 71% As-Is / 65% As-Stabilized
Term: 2 Years
Amortization: Interest Only
Recourse
Prepayment Penalty: None
Lender Fee: 0.5%

Transaction Description

George Smith Partners arranged a $1,527,000 cash-out refinance bridge loan on a 35% occupied, shadow-anchored, multi-tenant retail property in Castaic, California. The Sponsor recently purchased the property for $2,000,000 all-cash at a trustee auction and sought a bridge loan to provide funds to stabilize the property as well as cash-out. Sized to 71% of as-is value and 65% of as-stabilized value, the two year bridge loan is interest only and floating at Prime + 1 with no prepayment penalty. Interest is not charged on the holdback until funds are drawn. The subject property is located in a tertiary market without an anchor tenant and very low occupancy which prevented many lenders from entertaining a cash out request. GSP identified a lender that understood the sponsor was experienced enough to reposition the asset. A $527,000 “good news” budget was allocated for tenant improvements and leasing commissions to complete the reposition upon successful signing of new leases. GSP underscored that the property was shadow anchored by a Walgreens and highlighted that the sponsor would still have significant equity in the property remaining even after the cash out at initial funding. This ultimately allowed the lender to get comfortable with significant cash out and even fund an interest reserve during the life of the loan