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JV Equity/Pref/Mezz

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    $10,737,375 Joint Venture Equity for a Built-for-Rent Development; Savannah, GA

    April 27, 2022

    Transaction Description

    George Smith Partners advised on $10,737,375 in Joint Venture equity for the ground-up development of a Built-for-Rent community in Savannah, GA. When complete, the Project will consist of 142 single-family homes on 66 acres of land. The Project is located just a 20-minute drive outside of downtown Savannah and just 3 miles northwest of Savannah Quarters Country Club and Blue Moon Crossing; a major retail center in the area.

    GSP marketed the transaction broadly and found several equity providers interested in the Project. Time was of the essence as the Sponsor had closed on the land and was ready to start horizontal development. GSP worked with the Sponsors to pick a group that could move quickly and help share cost overruns. Construction is expected to take 36-months and for the Project to be completed and leased up by Q1 2025.

    Equity Structure: 90/10

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    $46,890,000 Debt and JV Equity Financing for a Ground-Up Single-Family Build-to-Rent Development; Phoenix, AZ

    February 9, 2022

    Transaction Description:

    George Smith Partners successfully arranged a total of $46,890,000 in non-recourse debt and joint venture equity financing for the ground-up development of a single-family build-to-rent community in Phoenix, AZ. The Project spans approximately 14 acres and will feature 185 units across 150 stand-alone residential buildings located just 15 minutes west of Downtown Phoenix. The financing capitalized the acquisition of the development and related construction costs.

    The Sponsor, a top tier homebuilder based in the Southwest, identified the site as an ideal candidate for re-entitlement to residential, and worked alongside the City to fast-track the change of use. The development team recognized the top-tier investment potential of the site given that build-to-rent product has been the fastest growing asset class in the U.S. housing market. Demand has grown exponentially as new ground-up single-family rental communities in the Phoenix area are not only averaging high absorption rates, but they are also achieving 42% rent premiums over neighboring garden-style apartments. GSP was able to identify a non-recourse construction lender with strong local knowledge that understood the high value of the re-entitled land, the strong local need for rental housing, as well as the Sponsor and joint venture equity partner’s extensive background and expertise in the BTR space.

    All Terms Confidential

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    $55,500,000 Debt and JV Equity Financing for a Ground-Up Single-Family Build-to-Rent Development; Tucson, AZ

    January 12, 2022

    Transaction Description:

    George Smith Partners successfully secured a combined $55,500,000 in non-recourse debt and JV equity financing for the development of a ground-up, single-family, build-to-rent community in Tucson, AZ. Spanning 17.1 acres, the Project features 225 units across 168 stand-alone residential buildings and is part of a multi-phase master planned community (expected to span approximately 4,800 acres). The financing allowed for the acquisition of the development site and an anticipated groundbreaking in Q1 2022.

    The Sponsor, a best-in-class homebuilder based in the Southwest, identified the site given its strategic proximity to Tucson’s fast-growing tech corridor. Build-to-rent communities have gained significant traction during a time where vacant rental units are being absorbed in less than 15 days in the Tucson submarket. The Sponsorship team recognized the substantial value behind the grand vision of the master planned community, supported by local knowledge and industry expertise in BTR developments. GSP was able to identify a non-recourse construction lender who not only understood the rapidly growing demand for rental units in a high-growth submarket, but also the Sponsor’s ability to execute on the business plan. GSP was also able to identify a joint venture equity partner that is actively targeting new investments in the BTR space nationwide.

    All Terms Confidential

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    $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%

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    $47,355,000 Construction Financing and $16,500,000 Equity Placement for Two Multifamily Development Communities; Boise, ID

    November 10, 2021

    Transaction Description:

    George Smith Partners successfully advised on $47,000,000 in construction financing and $16,500,000 in JV Equity for the development of two multifamily communities, totaling 213 units with 184,900 of net rentable square feet located in Garden City, a submarket of Boise, ID. The Sponsors have a long-term bias toward the market, having completed over $75,000,000 in financing in the area. This transformative Project is a key component of their overall master plan and vision for Downtown Garden City.

    GSP worked through several strategies to source the right non-recourse financing terms and joint-venture equity partner for the ground-up multifamily community. Ultimately, GSP successfully obtained several financing options. The Sponsor selected a life-company lender with exceptional terms and a joint venture equity capital partner with a long-term partnership vision.

    The Sponsor projects a timely delivery and lease-up period of the Project in late 2022. The demand for housing remains robust in Garden City due to the continued tailwinds, driven by the influx of individuals seeking housing in Idaho.

    Rate: 4.5%
    Term: 2-year construction and 3-year perm
    LTV: 74%
    Guaranty: Non-Recourse

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    $5,500,000 1st Mortgage and $1,200,000 Pref Equity Placement for 26-unit Multifamily Value-Add Acquisition; San Diego, CA

    October 27, 2021

    Transaction Description:

    George Smith Partners successfully placed high-leverage combined 1st and Pref Equity financing to 90% LTC for the acquisition of a 26-unit multifamily community in San Diego, CA. The 5-building 1940/1980’s Project will be repositioned and will require significant upgrades to all improvements more than $40,000/per unit. The Property is 100% occupied and the Borrower’s business plan includes “Cash for Keys” to remove all existing tenants, complete renovations and increase rents by an average of 100%. Stabilization is projected well within the 2-year term of the financing. The Project is part of a large portfolio of similar value-add multi-family repositions completed by the Sponsor in the San Diego area.

    Rate: 4% / 11.5%
    Term: 24 months
    Guaranty: Recourse
    Leverage: 90% combined

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    $2,100,000 Co-GP Raise for a 250-unit Multifamily Development; Phoenix, AZ

    October 13, 2021

    Transaction Description:

    George Smith Partners placed a $2,100,000 Co-GP investment on a proposed 250-unit multifamily development site in Phoenix, AZ. The land is under contract with entitlements completed and development approvals underway. The Project will be a resort-style community comprised of studio, 1, 2 and 3-bedroom units in a farm-style design offering a clubhouse amenity, fitness gym, outdoor recreational areas as well as attached and detached garages. The Project is located on a main intersection in one of Phoenix’s emerging suburban villages with 15-minute access to downtown via the recently opened Loop 202. This area is served by over 300,000 square FEET of national credit big box, grocery anchored and service retail. The Co-GP investment will allow the Sponsor to complete the predevelopment phase to shovel ready. It will also allow the Sponsor/Developer to collect 100% of its developer and construction management fees. The estimated project cost is $60,000,000. George Smith Partners has been exclusively engaged to arrange the entire capital stack for the next phase of the Project.

    All Terms Confidential

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    $10,000,000 JV Equity for Workforce Housing; Tertiary Mountain States

    June 23, 2021

    Transaction Description:

    George Smith Partners successfully placed $10,000,000 of joint venture equity for the construction of a 134-unit workforce housing development in a tertiary Mountain State market. There is considerable demand due to the quality of life and a D1-university in close proximity. GSP structured a 90/10 co-invest with an out of state developer with a robust pipeline.

    Though guided to an expeditious close, the equity raise faced a few challenges. GSP brought the deal to market early in COVID when the economic ramifications of stay-at-home policies were uncertain. Additionally, the Project’s location in a tertiary market with only 50,000 people led to multiple groups being hesitant to deploy capital. However, the effects from COVID and the state’s pro-business economic policies eventually were shown to be a positive factor in multifamily demand.

    All Terms Confidential

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    $7,100,000 JV Equity Financing for 109-Unit SFR Construction in an Opportunity Zone; Phoenix, AZ

    March 31, 2021

    Transaction Description:

    George Smith Partners successfully advised on $7,100,000 in joint venture equity financing for a 109-unit build-to-rent and Opportunity Zone transaction in Phoenix, AZ. This single family for rent community will offer one, two and three-bedroom detached homes with upscale furnishings and private yards for most units. This was the first transaction for our Sponsor who is optimistic about the popularity and emerging trend of the build-to-rent niche.

    All Terms Confidential

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    Over $6 Million Equity Raise for 85-Unit, 208-Bed Student Housing Development in Memphis, TN

    September 30, 2020

    Transaction Description:

    George Smith Partners was retained to source the equity required to build a 208-bed student housing project in a secondary market in Memphis, Tennessee. GSP faced many challenges in sourcing the equity needed for this project. During the COVID-19 pandemic, many colleges and universities changed from in person classes to online classes. Students had no reason to reside near or on campus except to be away from parents and near friends. There is increased demand for off campus housing because the universities are de-densifying the dorms. In addition, while this University was showing a growth in student population, it was not a “power” school with a large football program. These risks were mitigated by having a limited new student housing supply over the past two years, a best in class sponsor and a robust return on cost even with rents discounted due to COVID that could absorb short term shocks. The Investor and Sponsor also believe that this Project will open after a vaccine is found and perform as outlined in the proforma.

    Cumulative Preferred Return: 9.00%
    Waterfall: Confidential
    Hold: Expected 5 to 10 years with at least one refinance

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    $51,750,000 Senior Construction Financing & $16,200,000 Mezzanine Debt Placement for the Development of a Grocery Anchored Shopping Center; Kona, Hawaii

    January 15, 2020

    Transaction Description:

    George Smith Partners advised on the placement of $51,750,000 and $16,200,000 Senior Debt and Mezzanine debt respectively for the ground-up development of an institutional quality 204,275 SF outdoor shopping center that will be located along Kuakini Highway, one of the island’s most trafficked thoroughfares. The Property, which sits on a rare fee-simple 20-acre site, will provide patrons with easy access to both Henry Street and Palani Road and over 700 parking spaces (representing a parking ratio of 4:1,000 SF).

    Challenges:

    Although the Sponsors who partnered with a major life company, had extensive prior career experience in the field of commercial real estate development, the Project represented the Sponsor’s largest development to date. The development of the Project had already commenced adding another layer of complexity to the transaction.

    Solutions:

    GSP focused on the lack of new retail development on Kona and specifically the anchor tenant’s commitment to relocate their store from an adjacent shopping center (less than 0.50 miles). In addition, GSP was able to convey to capital sources the immense value of the fee simple ownership of the site – a rare occurrence in Hawaii where most land is leased from the State. Ultimately GSP was able to identify two lenders who not only understood the value of the fee simple ownership of the site but also understood the lack of new retail space and the subsequent demand.

    All Terms Confidential

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    $12,000,000 in Joint Venture Equity and $23,900,000 in Non-Recourse Construction Financing for a 185 –Single Family Build-To-Rent Community; Western U.S. Secondary Market

    November 27, 2019

    Transaction Description:

    George Smith Partners successfully advised on $12,000,000 in joint venture equity financing and $23,900,000 in non-recourse senior construction financing for the ground-up development of a 185- home build-to-rent community. Single-family-for-rent communities are a newer asset class and this project was among the first in the market. These communities offer the experience of living in a single-family home with the ease and cost of living in an apartment building. The Sponsor expects the project to be well received as there are distinct competitive advantages over the existing apartment product in the market place for several reasons including the new construction, low density and both interior and exterior privacy.

    Rate: LIBOR+5.00%
    Term: 3+1+1
    Leverage: 64% LTC
    Guaranty: Non-Recourse