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JV Equity/Pref/Mezz

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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

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    $25,000,000 Construction Mezzanine Financing for Speculative Office in Tempe, Arizona

    October 3, 2018

    Transaction Description:
    George Smith Partners arranged $25,000,000 of Mezzanine construction financing and supported the sponsor in negotiating the $80,500,000 senior financing for a speculative, mixed-use, office and retail project located on North Scottsdale Boulevard and Tempe Town Lake in Tempe, Arizona. This phase of the development includes 250,000 square feet of a 15 story, Class A, high rise office space and 44,000 square feet of lifestyle retail space.

    Challenges:
    Given the perceived historical volatility of the Phoenix and Tempe office markets, and the speculative nature of the business plan, many potential investors were unwilling to take on the risk. Preleasing was critical to the advancement of the Project and to the capital markets. The Senior Lender mitigated the uncertainty by requiring a minimum leasing threshold to be achieved prior to advancing any loan proceeds. However, the local leasing market would not commit to new leases without a committed delivery date.

    Solution:
    The Sponsor, with George Smith Partners’ assistance, was able to develop an alternate structure to the Senior Loan. This allowed the Sponsor to fully engage the equity solution and provide a certain completion date to the Lenders and the tenant market.

    TERMS ARE CONFIDENTIAL

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    $8,600,000 in Acquisition and Development Joint-Venture Equity Financing for 52-Unit Ground-Up Multifamily Development

    July 18, 2018

    GSP successfully secured $8,600,000 in Joint-Venture Equity Financing for the acquisition, pre-development and vertical construction of a 52-unit luxury multifamily apartment complex with 3,000 sf of retail space. The Partnership allowed the Sponsor to acquire the West Los Angeles property, buy-out the existing tenants and fund pre-construction expenses including building permits which are expected to take approximately 12-15 months to obtain. GSP was hired by the Sponsor to provide advisory services throughout the development, including financing the construction loan. After engaging with over seventy groups who focus on providing Joint Venture Equity Financing, GSP was able to identify a West-Coast based family office as an equity finance partner. GSP structured a mutually beneficial, long-term relationship that both the Sponsor and the capital partner stand to gain from.

    ALL TERMS CONFIDENTIAL

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    $58,000,000 of Debt and Joint Venture Equity Financing – $45,000,000 Non-Recourse Acquisition Financing and $13,000,000 of Joint Venture Equity, 680-Unit Atlanta Workforce Multifamily

    October 25, 2017

    GSP successfully arranged a total of $58,000,000 in Acquisition Debt and Joint Venture Equity Financing for the acquisition and reposition of a 1970’s/1980’s vintage work-force housing portfolio consisting of 680-units in an Atlanta submarket. The Financing consisted of $45,000,000 in non-recourse acquisition debt financing and $13,000,000 of joint venture equity (80%/20% co-invest). GSP structured the variable rate debt facility as two uncrossed loans utilizing the Agency green program to achieve favorable leverage of 75% loan-to-value and a reduced interest rate of LIBOR + 2.15%. The Sponsor with their newly formed joint venture equity partnership will implement a value-add reposition strategy by investing a combined $5,500,000 into the two properties, to upgrade property common area amenities, interiors, and implement a green–energy saving initiative. Through the reposition, Sponsor’s cash flow is maximized as the loan is interest only during the initial four-year term.

    Rate: 30-Day LIBOR + 2.15%
    Term: 10 Years
    Amortization: 48 months interest only; 30-year amortization thereafter
    LTV: 75%
    Prepayment: 12-month Lock-out, 1% pre-payment penalty thereafter
    Guarantee: Non-recourse
    Origination Fee: 0.50%