Don't Miss a Fact,
Sign Up for FINfacts!

FINfacts is a weekly newsletter highlighting recent financings and economic insights.

Subscribe Here

Construction

  • Expand

    $39,000,000 Construction Debt and Advised on $20,000,000 LP Equity for Seven-Story, 137-Unit Mixed-Use Development; Midtown Sacramento, CA

    November 23, 2021

    Transaction Description:

    George Smith Partners successfully placed $39,000,000 in construction debt and advised on $20,000,000 Limited Partner equity for the ground up construction of 137-unit mixed-use development with ground floor retail in Midtown Sacramento, CA. The Project is the second asset that GSP has structured both debt and equity for a sequence of planned multifamily developments. Pricing for the non-recourse construction loan tightened from the first transaction six months ago.

    The site will be developed into a seven-story building consisting of six levels of rental units, parking, and ground floor retail. Situated in Midtown, Sacramento’s trendiest neighborhood, the Property is walking distance to restaurants, shops and is conveniently positioned near the rail station and a local highway. The area has increasingly attracted significant public and private investment due to its proximity to employment hubs and lifestyle amenities.

    The capital markets were weary of ongoing supply chain and increasing construction costs. GSP worked with the Lender and equity investor to structure contingency levels that were acceptable to both. The Sponsor was provided with competitive, non-recourse construction loan and an investor that could grow with their future development needs.

    Rate: Daily Simple SOFR + 270 (2.79%)
    Guaranty: Non-recourse
    Amortization: Interest Only
    LTV: 65%

  • Expand

    $46,000,000 Construction Loan for Phase 1 of a 400-Unit Multifamily Development; Bozeman, MT

    October 20, 2021

    Transaction Description:

    George Smith Partners successfully placed financing for phase 1 of a 400-unit multifamily development located in Bozeman, MT. The Project will be a significant upgrade to other assets in the market, offering an in-complex coffee shop, yoga studio, clubhouse, and multi-acre park. Unlike the competition, many units will have direct access to garage parking.

    The garden style project is located within an Opportunity Zone, which drew attention from national equity groups eager to deploy capital. GSP, a leader in Op Zone Capital advisory, brought several equity partners to the table who understood the value add to the market.

    Phase 1, consisting of 268 units, is set to be complete by late 2023. Phase 2, consisting of 132 units, will commence construction in 2023, with the entire project stabilizing in 2024. This market has seen a price increase of over 200% in housing since 2016. It continues to grow at a double-digit rate largely due to remote work, the expansion of the Big Sky and Yellowstone resort destinations, and Kevin Costner being amazing.

    Rate: Sub 3%
    Term: 3 years + 2, 1-year extensions
    Guaranty: Recourse, Burning Off at C of O
    Leverage: 60% Loan-to-Cost

  • Expand

    $8,700,000 Construction Financing for Office Development; Denver, CO

    October 13, 2021

    Transaction Description:

    George Smith Partners successfully advised on a $8,700,000 construction financing for the development of a 5-story, 23,654 square feet office building located in Denver, CO. The Sponsor’s combined 30-year real estate development experience in conjunction with their partner’s 40+ years of commercial leasing experience was key to securing the financing. GSP worked through several strategies with the Sponsor to source the right non-recourse financing terms for the ground-up ‘spec’ office transaction. Ultimately, GSP successfully obtained several highly reliable financing options, and the Sponsor selected a lender with exceptional terms.

    The Sponsor projects a timely delivery for completion of the project in late 2022 and intends to market the lease of the building during design and construction. With the robust economic recovery from the COVID-19 pandemic, the greater Denver metropolitan area is experiencing rapid job growth and expansion, increasing the demand for office spaces.

    Rate: L + 925 w/ 0.50% Libor floor
    Term: 18 months
    LTC: 75%
    Prepayment Penalty: 12 months min. interest
    Guaranty: Non-Recourse

  • Expand

    $105,000,000 Construction Loan and $17,120,000 Limited Partner Equity for the Development of a For-Sale Residential Project; Hayward, CA

    September 29, 2021

    Transaction Description:

    George Smith Partners placed a $105,000,000 non-recourse construction loan and $17,120,000 of Limited Partner Equity for a for-sale residential project in Hayward, California. The Project will be built in phases and have 123 townhomes and 66 condominiums providing much needed workforce housing to the area. The Project will also have some affordable units for sale.

    Two GSP teams were able to combine efforts and executed an effective and in-depth marketing campaign to help the capital markets understand the opportunity appropriately while finding solutions to various challenges that arose during the entire process. GSP marketed and highlighted the Project’s strength, the phasing nature of the build schedule, the projected sales prices and the forecasted upward trajectory in both sales price growth and sales pace growth. GSP was able to source capital providers on the Project that were comfortable with both the depth and experience of the Sponsor as well as their belief in the continued growth of the Bay Area.

    Ultimately, the professionalism and expertise of the two GSP teams on the deal coupled with the proficiency and extensive experience of the Sponsor allowed for a successful close.

    Loan-To-Cost: 75%
    Stabilized Loan-To-Value: 70%
    Term: 36 Months
    Amortization: Interest-Only
    Guaranty: Non-recourse

  • Expand

    $37,500,000 Non-Recourse, Stretch Senior Construction Loan for a Mixed-Use OpZone Development; Western States

    September 22, 2021

    Transaction Description:

    George Smith Partners placed a $37,500,000 non-recourse, stretch senior construction loan for a 7-story ground-up development of a mixed-use OpZone Project. When complete, the Project will consist of 151 apartment units (including 14 Live/Work Lofts), approximately 15,000 sf of restaurant space, 10,000 sf of retail, and 12,000 sf of office space. The average apartment size is 730 sf, and most units will have private balconies with unobstructed views of the desert and city.

    As the Project is a first of its kind in the surrounding area, finding appropriate comparable projects that would speak to the strength of this market proved to be a challenge. GSP focused on the Project as a marquee development and detailed the new employment opportunities from Google, and a hospital expansion, sports training facility, along with the emerging renaissance happening within the downtown area. GSP was able to demonstrate the immense intrinsic value from the ongoing renovation of the City Hall Plaza and Events Center — a 500-seat canopied amphitheater and 60,000 sf of programmable deck area for hosting community events — that sits directly across from the Project. GSP also worked through the Sponsor’s GMP budget with the Lender during a period of escalating cost, showcasing the strength of the Sponsor group in their local market. In turn, this created a comfort level needed by the Lender with regards to the commercial space of the Project.

    GSP executed a broad and in-depth marketing campaign to help capital markets understand the opportunity appropriately. These efforts resulted in a successful close with proceeds achieving the Sponsorship’s objective.

    Loan-To-Cost: 75%
    Stabilized Loan-To-Value: 70%
    Term: 24 Months + 6 Month Extension
    Amortization: Interest-Only
    Guaranty: Non-Recourse

  • Expand

    $33,000,000 Stretch – Senior Non-Recourse Construction Loan for Ground-Up Luxury Condominiums; Los Altos, CA

    September 15, 2021

    Transaction Description:

    George Smith Partners successfully advised on $33,000,000 in construction financing for a 27- unit luxury condominium project to be built in downtown Los Altos, CA. This high-end offering is the first larger scale project for the newly formed, but individually experienced sponsorship group. The Sponsor has significant historical ground-up experience and will self-perform as the General Contractor. GSP worked through several strategies with the Sponsor including preferred equity, mezzanine debt and an all in one, stretch-senior execution. Ultimately, GSP successfully obtained several highly reliable options for each strategy and the Sponsor selected an integrated full-service construction lender. GSP negotiated a land value contribution in excess of cost and as a result, the land lift allowed the Sponsor to invest less up-front equity than otherwise required to close the transaction.

    The Sponsor projects completion of the project in late 2023. Due to the supply constrained market for the condo units, they expect the project to be completely sold out shortly thereafter.

    Rate: L + 8.25% w/ floor of 9.0%
    Term: 30 months
    LTC: 75%
    Prepayment Penalty: 9 months
    Guaranty: Non-Recourse

  • Expand

    $20,530,000 Non-Recourse Construction Financing for a 25-Unit Luxury Beachfront Condominium, For-Sale Development; Cocoa Beach, FL

    September 8, 2021

    Transaction Description:

    George Smith Partners successfully arranged $20,530,000 in non-recourse senior construction financing for The Surf, a beachfront condominium project in Cocoa Beach, FL. The Project consists of 25 luxury residential units with sale prices ranging from $975,000 to $2,500,000, as well as 3 ground floor retail units. The Project is currently 75% pre-sold. Per Florida statutes, any buyer deposit amount over 10% of the purchase price may be used towards development costs, but a large portion of those deposits are not due from buyers until building top off. GSP was able to successfully secure a lender comfortable with crediting future deposits to decrease the Sponsor’s up-front equity requirement.

    The Sponsor’s co-developer and GC tragically passed in early 2020, leading them to engage a new group. While the new GC had extensive experience in luxury housing development, they are relatively new to ground-up, multi-level condominium development. GSP leveraged its extensive lender network, strong pre-sales, and the Orlando-based Sponsor’s strong development track record in this submarket and product type to provide non-recourse construction financing.

    The term is 24 months with interest-only payments and 6 months minimum interest. The senior note was sized to 64% LTC. GSP structured the loan, crediting future sales deposits towards the total equity requirement, thereby eliminating any additional out-of-pocket equity required at closing above the land acquisition and predevelopment costs already spent to date.

    Rate: WSJ Prime +4.50%
    Term: 24 Months + Two 2-Month Extensions
    Amortization: Interest-Only
    Loan to Cost: 64%
    Prepayment: 6 Months Minimum Interest
    Guaranty: Non-Recourse
    Lender Fee: 1% In, 1% Out

  • Expand

    $35,000,000 High Leverage Construction Loan for 40 To-Be-Built Condominiums; Near Lake Tahoe

    September 8, 2021

    Transaction Description:

    George Smith Partners successfully secured $35,064,000 (80% Loan to Cost) in non-recourse construction completion debt financing for a luxury condominium property near Lake Tahoe. The 40-unit project is located in a tertiary market near ski resorts and overlooks Lake Tahoe. The Sponsor acquired the land and existing, partially completed, four-story concrete and steel structure and underground parking garage at a deep discount as an REO from a bank in 2015. Engineering and architectural updates were completed prior to loan closing.

    The for-sale, residential product in a tertiary market presented challenges to the capital markets. GSP was able to source a lender who was familiar with the market, comfortable with the basis, comfortable with the barriers to entry and strong market demand for the product.

    Term: 24 months plus one 1-year extension option
    Loan To Cost: 80%
    Prepayment Penalty: 12 months minimum interest

  • Expand

    $35,900,000 Construction Takeout Financing for Single Tenant Industrial Asset; Austin, Texas MSA

    September 1, 2021

    Transaction Description:

    George Smith Partners successfully secured $35,900,000 in construction takeout financing for a state-of-the-art industrial project located in the Austin, Texas MSA. The manufacturing, research and office facility is 130,000 square feet. Spanning a 103-acre site, the building offers an additional 93 acres of undeveloped, shovel-ready land, yielding a development potential of more than 1,000,000 square feet of light / heavy commercial and industrial use.

    The financing recapitalized construction costs related to the facility development, and utility infrastructure improvements.

    The Sponsorship team acquired the undeveloped site in 2019, a strategic parcel in a rapidly developing industrial corridor, and subsequently developed the Class A facility. In order to take out the construction financing, GSP was able to identify a local lender with the expertise to develop a credit profile that appropriately accounted for the startup’s long-term viability, while also understanding the significant value of the excess developable land in a high-growth micro market within the Austin MSA.

    All Terms Confidential

  • Expand

    $23,000,000 Construction Financing for 117-Unit Multifamily Construction; Lansing, MI

    August 25, 2021

    Transaction Description:

    George Smith Partners successfully advised on $23,000,000 in senior debt construction financing for a 117-unit multifamily transaction in Lansing, MI. This is the second financing arranged by GSP for the Sponsor and follows on the successful $44,500,000 financing GSP advised on. GSP successfully navigated the markets to identify and close with a lender that was comfortable with PACE financing layered in the capital stack. This multifamily project will offer studios, one and two-bedroom units with modern furnishings.

    Terms Confidential

  • Expand

    $26,000,000 Total Construction, LP Equity, & Co-GP Platform Advisory, SFR for Rent; Fort Meyers, Florida

    August 18, 2021

    Transaction Description:

    As the leader in the rapidly emerging Single Family for Rent (SFR for Rent) and Build-to-Rent (BTR) multifamily asset classes, George Smith Partners worked with our client to structure an optimal structure for the development of the 130-unit project located in Fort Meyers, FL. Throughout the year-long engagement, GSP and the Sponsorship secured various investment structures including multiple Co-GP, LP, Pref, and Senior construction facilities, ultimately structuring a high leverage 70% recourse loan and a full equity structure of 80% LP + 20% Co-GP.

    With the intention of securing platform participants, the chosen structure will allow for a rapid expansion of the portfolio on a favorable deal by deal basis. The Sponsorship plans to scale with their partners to an additional 600 units in the next 12 months to meet the rapidly growing need for housing across Florida. The platform investment will also provide the opportunity to grow into other high growth markets across the south and east coasts.

    SENIOR DEBT
    Rate: 3.75%
    Term: 4 years
    LTC: 70%
    Guaranty: Recourse

    EQUITY
    80% JV & 20% Co-GP Equity

  • Expand

    $18,600,000 Construction Financing for 109-Unit SFR Construction in an Opportunity Zone; Phoenix, AZ

    August 11, 2021

    Transaction Description:

    George Smith Partners successfully advised on $18,600,000 in construction financing for a 109-unit build-to-rent and Opportunity Zone transaction in Phoenix, AZ. This follows on the successful $7,100,000 JV equity financing GSP advised on. This single family for rent community will offer one, two and three-bedroom detached homes with upscale furnishings and private yards for most units. The Sponsor has five more transactions under contract. This was the first transaction for our Sponsor who is optimistic about the popularity and emerging trend of the build-to-rent niche.

    Terms Confidential