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Bridge Loans and Financing

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    Non-Recourse Bridge Acquisition Financing for Industrial Building; Gardena, CA

    July 21, 2021

    Transaction Description:

    George Smith Partners successfully arranged a bridge acquisition financing for a single-tenant industrial building in Gardena, CA. The Property is 9,300 SF on an approximate 18,731 SF parcel. The previous owner occupied the space, and the building is now vacant. There was an existing environmental issue that limited the pool of interested capital providers. However, GSP leveraged its market expertise and relationships to identify a lender comfortable with the Property and Sponsor, who is a repeat client. GSP secured a 12-month, non-recourse bridge loan at 7.90% fixed with interest-only payments and no prepayment penalty. This will provide the Sponsor time to resolve the environmental issue, lease the Property and season it for permanent financing. The financing closed within 12 days of term sheet issuance.

    Rate: 7.90% Fixed
    Term: 12 months, with Extension Options
    Amortization: Interest Only
    LTP: 40%
    Prepayment: None
    Guaranty: None

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    $7,800,000 Bridge Loan for Acquisition and Heavy Value-Add Repositioning for Student Housing; Los Angeles, CA

    June 30, 2021

    Transaction Description:

    George Smith Partners successfully placed a $7,800,000 loan for the acquisition and repositioning of a student housing property serving a major Southern California university. George Smith Partners went to a variety of lenders and identified a non-recourse capital provider who believed in the deep value-add business plan, with 23% of loan proceeds funding CapEx.George Smith Partners structured the loan at 70% of total project cost. The funding covers the acquisition, CapEx, construction costs, and the interest reserve.

    Rate: 30-day LIBOR + 345 basis point spread, 4.45% rate floor
    Term: 36 months, two 12-month extension options
    Leverage: 70% LTC
    Amortization: Full term interest only
    Recourse: Non-recourse with standard carve outs
    Fee: 1.5% Origination Fee, 0.5% Exit Fee

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    Retail Acquisition Financing with Less Than 100% Collection Rate; Los Angeles, CA

    June 23, 2021

    Transaction Description:

    George Smith Partners successfully arranged bridge acquisition financing for a 6-unit retail property in Los Angeles, California. The Subject Property took a major hit with rent collections during the Covid-19 pandemic and was operating below market conditions. GSP identified a capital provider who was able to offer an aggressive rate and terms, required no holdbacks of any sort, required no deposits to be held at their branch and provided an open prepayment penalty structure that allowed the Sponsor flexibility once the Subject Property is stabilized and seasoned.

    Rate: 3.75%
    Term: 7 years
    Amortization: 25 years
    LTV: 50%
    Prepayment Penalty: None
    Minimum Interest Payments: None
    Guaranty: Full recourse
    Banking Relationship/Deposits Required: None

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    Non-Recourse Bridge Acquisition Financing for Industrial Building; Wilmington, CA

    June 2, 2021

    Transaction Description:

    George Smith Partners successfully arranged bridge acquisition financing for a single-tenant industrial building in Wilmington, CA. The Property is 3,950 SF on an approximate 8,640 SF parcel. The previous owner occupied the Property, and the building is now vacant. GSP secured a 12-month, non-recourse bridge loan at 7.90% fixed with interest only payments and no prepayment penalty. This will provide the Sponsor time to lease the Property and season it for permanent financing. The financing closed within two weeks of term sheet issuance.

    Rate: 7.90% Fixed
    Term: 12 Months, with Extension Options
    Amortization: Interest Only
    LTP: 57%
    Prepayment: None
    Guaranty: None

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    $40,000,000 Non-Recourse Bridge Financing for a 330-Bed, Student Housing Property; Orange County, CA

    May 26, 2021

    Transaction Description:

    George Smith Partners successfully placed a non-recourse $40,000,000 bridge loan to fund the acquisition and repositioning of a 330-bed student housing project in Orange County, California during the COVID-19 pandemic. Directly adjacent to a non-power five campus, the University’s decision to not hold in-person classes due to COVID-19 severely impacted the Property’s occupancy levels at the time of acquisition. Additionally, the Project was undergoing renovations when the pandemic struck.

    GSP leveraged its diverse lender relationships to attain 70% of project cost, including an extensive CapEx budget to be used for existing unit renovations and the construction of additional residential density. GSP ensured no negative arbitrage by structuring a draw schedule accretive to the Sponsor’s business plan. Despite the economic uncertainty during the transaction, GSP worked with the Lender to maximize proceeds while addressing Lender concerns of potential COVID related shortfalls.

    Rate: LIBOR + 3.40%
    Term: 36 Months, Two 1-year Extensions
    LTC: 70%
    Guaranty: Non-Recourse except for standard carve outs, bad acts, and environmental. Completion guaranty
    Fee: 1.0% Origination

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    $8,400,000 Non-Recourse Acquisition/Bridge Loan for a 50% Occupied Apartment Building; Hayward, CA

    May 19, 2021

    Transaction Description:

    George Smith Partners identified a national balance sheet lender with an intimate knowledge of the Hayward submarket and arranged $8,400,000 in acquisition and bridge financing for the purchase and reposition of a currently 50% occupied, 1960’s-built apartment complex located in Hayward, CA. The Sponsor placed the portfolio under contract during the COVID-19 pandemic.

    The loan includes $1,350,000 of future funding for extensive renovations of unit interiors and exterior upgrades, including an earthquake retrofit. Interest is not charged on the holdback until funds are drawn. This Capital Provider also structured and capitalized an interest reserve to cover the shortfall of cash flow during repositions. Sized to 76% of the total capitalization, the three-year bridge loan is interest only for 36 months and carries a floating rate of LIBOR + 4.25% and include two extension options for up to a term of five-years.

    Rate: LIBOR + 4.25%
    Term: 3 Years, with two 1-year extensions
    Amortization: Interest Only
    Loan-to-Cost: 76%
    Repayment: Carve-Outs Only
    Prepayment: 18 months
    Loan Fee: 1.0% in / 0.25% exit

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    79.5% LTV Acquisition Loan for 6-Unit Multifamily Property; Koreatown area of Los Angeles, CA

    May 5, 2021

    Transaction Description:

    George Smith Partners structured $1,590,000 of acquisition bridge financing for a 6-unit multifamily building in a well-located area of the Koreatown section of Los Angeles. The existing building is almost 100 years old and underutilizes the potential density that the site allows for. The Sponsor plans to entitle the site for a larger multifamily development down the line. A 12-month term will give them ample time to prepare to be shovel ready. GSP was able to secure a high leverage execution between a senior lender and a mezzanine lender that provided 79.5% LTV based on purchase price. The blended rate of the total debt stack is 8.84% and is interest only. While the senior loan is non-recourse, the mezzanine lender does require recourse on their portion.

    Blended Rate: 8.84%
    Term: 12 Months
    Loan-to-Purchase: 79.5%
    Prepayment Penalty: None
    Guaranty: Non-Recourse to Senior Lender, Recourse to Mezzanine Lender

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    $21,000,000 Cash-Out (105% of cost basis), Non-Recourse, Pre-Stabilization Bridge Financing on a Newly Constructed and 9% Leased Apartment Community; St. Louis City, Missouri

    May 5, 2021

    Transaction Description:

    George Smith Partners successfully placed $21,000,000 in bridge financing for a 111-unit apartment community in St. Louis, Missouri that retired a high-leverage construction loan, funded a lease-up and operating reserve, converted from a recourse to non-recourse structure, materially lowered the Borrower’s cost of capital, and provided enough proceeds at close (100% of loan proceeds were released upon loan closing) to cash out 105% of the Borrower’s cost basis, although the Property was less than 10% occupied. The eighteen-month loan term provides the Borrower with time to stabilize and season the asset prior to either selling or refinancing it with long-term permanent debt in today’s low interest rate environment. GSP leveraged its expertise of the St. Louis market, long-standing lender relationships, and capital markets creativity to achieve the Borrower’s goals, which was primarily the maximum return of capital.

    Rate: Blended to 4.95%, Floating
    Term: 18 Months
    Amortization: Full-Term Interest Only
    LTV: 80%
    Lender Fee: 1% in / 1% out
    Prepayment: Six Months Minimum Interest
    Guaranty: Non-recourse

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    $8,400,000 Non-Recourse Acquisition/Bridge Loan for a 50% occupied Hayward, CA Apartments

    April 21, 2021

    Transaction Description:

    George Smith Partners arranged $8,400,000 in acquisition and bridge financing for the purchase and reposition of a currently 50% occupied, 1960’s-built apartment complex located in Hayward, CA. Our Sponsor placed the portfolio under contract during the COVID-19 pandemic. The financing includes $1,350,000 of future funding for extensive renovations of unit interiors and exterior upgrades, including an earthquake retrofit. Interest is not charged on the holdback until funds are drawn.

    GSP identified a national balance sheet lender with an intimate knowledge of the Hayward submarket. They structured and capitalized an interest reserve to cover the shortfall of cash flow during repositions. Sized to 76% of the total capitalization, the three-year bridge loan is interest only for 36 months and carries a floating rate of LIBOR + 4.25% and include two extension options for up to a term of five-years.

    Rate: LIBOR + 4.25%
    Term: 3 Years, with two 1-year extensions
    Amortization: Interest Only
    Loan-to-Cost: 76%
    Repayment: Carve-Outs Only
    Prepayment: 18 months
    Loan Fee: 1.0% in / 0.25% exit

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    $45,600,000 Non-Recourse Bridge Financing for Recapitalization of Lido Marina Village in Newport Beach, CA

    April 21, 2021

    Transaction Description:

    George Smith Partners structured and arranged $45,600,000 in bridge financing for the recapitalization of the Lido Marina Village, a 116,000 sf multi-block, waterfront boutique retail and office property on Balboa Peninsula in Newport Beach. Lido Marina Village features retail, restaurant, and office space in 14 separate structures including prime waterfront retail and restaurant spaces featuring spectacular harbor views, along with 47 boat slips, creating an iconic Newport Beach destination. Some highlighted restaurants include Orange County’s only Nobu and Malibu Farm locations. Retail tenants include first-to-market “laid back luxe” retailers such as Elysse Walker, LoveShackFancy, Serena & Lily, the RealReal, and Jenni Kayne. The Property stretches from the waterfront, across a public street and walkway to the Via Lido street-front retail. It also includes a 372-space parking structure and 91 on-grade parking spaces. The Project is located on 17 legal parcels totaling 3.5 acres, with 4 parcels held as leasehold interests. Since the acquisition in 2013, the Sponsor successfully rebranded Lido Marketplace as a super high-quality boutique and restaurant destination, featuring a “who’s who” of tenants. Even during the pandemic, Lido Marina Village occupancy stayed high, and the Sponsor signed new leases at “high street” rents. The Property has been thriving in part due to their shoppers feeling comfortable in the open air, pedestrian friendly and waterfront environment.

    Rate: Confidential
    Term: 2 years with two 1-year extensions
    Amortization: Interest Only
    Guaranty: Non-Recourse

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    $16,500,000 Bridge Refinance for 173-Unit Multifamily Property; Sunnyvale, CA

    March 31, 2021

    Transaction Description:

    George Smith Partners secured a $16,500,000 loan for a 173-unit multifamily property in Sunnyvale, CA. The first mortgage has a 12-month term at 5.9% with no prepayment penalty. The loan may be extended for an additional 12 months at 6.9%. The Sponsor developed the Property and has owned it for over 40 years. In the past year, occupancy and collections were negatively affected by COVID-19’s effects on tenants’ ability to pay rent. Occupancy was also negatively affected by the significant upgrades and renovations made to a much larger neighboring property which undertook an aggressive post-renovation releasing program. The Sponsor engaged GSP to supply a quick-close solution when the existing lender declined to renew its loan. Unlike most lenders, GSP’s Lender did not require reserves for potential COVID rental interruptions and closed within 10 days of the issuance of its term sheet without requiring an appraisal or other third-party reports.

    Rate: 5.9% Fixed in Year 1; 6.9% in Year 2
    Term: 12 Months + Extension Option for 12 Months
    Lender Fee: 1% + 1% Extension
    Amortization: Interest Only
    LTV: 30%
    Prepayment: Prepayable without penalty
    Recourse: Non-Recourse

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    $5,376,000 (60% LTC) Bridge Loan for Cash-Out Refinance of Industrial Building; Northern California

    March 24, 2021

    Transaction Description:

    George Smith Partners secured $5,376,000 of bridge financing for the refinance of a two-tenant industrial building in Fairfield, CA. The Property is favorably located within a mile of three major freeways and is only a 45-minute drive to both San Francisco and Sacramento. The building is currently 100% occupied, but there were cash-out proceeds required to reposition the Property to make it more attractive to potential buyers. The 26,000 SF building also has 95,000 SF of improved yard space adjacent, which is a major draw for the current tenants. GSP was able to secure a lender that could get comfortable with a majority of the income being derived from the yard space. The financing was comprised of a senior and a mezzanine loan. The blended terms provided a 60% LTC priced at 7.43% with a 1.20% origination fee. The 12-month terms provide the Sponsor the ability to execute his business plan.

    Blended Rate: 7.43% Fixed
    Term: 12 Months
    Amortization: Interest Only
    LTV: 60%
    Loan Fee: 1.20%
    Reserves: None
    Prepayment Penalty: None
    Guaranty: Non-Recourse for Senior / Recourse for Mezzanine Loan