Fixed Rate Construction Financing

George Smith Partners is placing ground up construction requests with a Regional Bank funding California multifamily rental development with five year fixed rate debt.  Sized to 65% of total construction cost, current coupons are sub-3.5% fixed for five years prior to floating over 30 day LIBOR for the remainder of the ten year term.  Interest is paid on funds as drawn; there is no negative arbitrage, and paid through an interest reserve on an interest only basis during construction.  The loan will begin to amortize upon stabilization.  Prepayments are structured as a step-down with the opportunity of a recourse burn-off.