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

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

Subscribe Here

multifamily

  • Expand

    Acquisition Loan for a 15-Unit Multifamily Property; 3.54% Fixed; 72% LTV; Houston, Texas

    May 25, 2022

    Transaction Description:

    George Smith Partners secured permanent financing for a 15-unit multifamily property located in Houston, Texas. The financing is fixed at 3.54% for 5 years. The deal went into application right before the Federal Reserve increased rates and before we experienced a run-up in treasuries. GSP’s good standing with the Lender ensured the original terms were honored until closing, notwithstanding the loan extension that took place and the rapid increase in the interest rate environment. The financing does not require any deposit relationship with the bank or any funds to be held back for reserves. The Lender’s processing/application fee was $2,000 and they had no origination fee.

    Rate: 3.54%, Fixed for 5 Years
    Term: 30 Years
    Amortization: 30 Years
    LTV: 72%
    Prepayment: 4, 3, 2, 1%
    Depository Relationship: None Required

  • Expand

    Cash-Out Refinance of a 16-Unit Multifamily Property; 3.1% Fixed; 70% LTV; Los Angeles, CA

    May 18, 2022

    Transaction Description:

    George Smith Partners arranged permanent financing for a 16-unit multifamily property located in Los Angeles, CA. The loan is fixed at a rate of 3.1% for 5 years and has 3 years of interest-only payments. The deal went into application several months ago when interest rates were 100 basis points lower. Because of GSP’s strong relationship with the Lender, the original terms were held in an increasing rate environment. The financing does not require any deposit relationship with the bank.

    Rate: 3.10%
    Term: 10 Years, Fixed for first 5 Years
    Amortization: 3 years Interest-Only
    LTV: 70%
    Prepayment: 3, 2, 1, 1, 1%

  • Expand

    Acquisition Bridge Loan for a 12-Unit Multifamily Community; San Diego, CA

    May 18, 2022

    Transaction Description:

    George Smith Partners secured an acquisition bridge loan for the repositioning of a Class-C apartment community in San Diego. The financing includes a holdback that will be used to renovate both the interior and exterior of the Property over a 12-month period including the addition of a single ADU (garage conversion).

    Given the Sponsors’ track record and their successful ability to substantially increase rents in this niche market, GSP was able to secure a Lender that could close quickly (within 25 days), without an appraisal, and allow a $1,000,000 2nd TD up to 98% of the total cost of the Project to accommodate an additional private party investment in the Property.

    Rate: 7% Fixed
    Term: 18 months + 6-month extension
    Min DSCR: 1.15:1.0
    Origination Fee: 1.5%
    Amortization: Interest-Only
    Guaranty: Recourse
    Prepayment: None

  • Expand

    $7,600,000 Cash-Out Refinance of a 30-Unit Multifamily Property at 3.5% – 80% LTV; Los Angeles, CA

    May 11, 2022

    Transaction Description:

    George Smith Partners arranged $7,600,000 in permanent financing for the refinance of a 30-unit multifamily loan located in Los Angeles, CA. Due to GSP’s strong relationship with this Lender, we were offered a special bucket of low-cost capital for select sponsors. GSP was able to connect our long-term client’s property to the lower cost capital. The Sponsor recently completed building improvements including unit renovations, new foundation, new structural beams, and system upgrades. The recent improvements allowed the Sponsor to increase rents thus increasing the value of the Property. GSP was able to provide the Sponsor with a 7-year term, fixed at a rate of 3.5%. The financing represents 80% loan to value with a minimum 1.20 DSCR. The flexible stepdown prepayment structure is equal to 2% in Year 1, 1% in Year 2, and 0% thereafter. The cash-out loan allows the Sponsor to use more equity towards continuing to grow their multifamily portfolio. Thanks to our long-standing relationship with this Community Development Lender, GSP was able to meet the Sponsor’s deadline and close this transaction within 45 days from signing the term sheet.

    Rate: 3.50%
    Term: 7 Years
    LTV: 80%
    Prepayment: 2,1,0

  • Expand

    $3,600,000 Acquisition Financing for 16-Unit Multifamily; West Hollywood, CA

    May 4, 2022

    Transaction Description

    George Smith Partners arranged $3,600,000 in acquisition financing for a 16-unit multifamily property in West Hollywood, CA. The Property came with five vacant units that were previously leased at well below market rents. The Sponsor, a repeat client, planned to renovate the vacant unit interiors and increase rents accordingly. GSP leveraged its network of relationships to source short-term, non-recourse, fixed rate financing with interest only payments with an early rate lock. However, the delayed appraisal report uncovered two units that were not legally permitted, which the lender excluded in its underwriting. GSP worked with the Lender, Appraiser and Sponsor on creative solutions to get as close to the original loan terms as possible. These negotiations required several extensions on the closing. Also, the rate lock eventually expired. Ultimately, GSP was able to get a $3,600,000 loan amount thanks in part to additional analysis and data provided to the Lender. GSP also leveraged its relationship with the Lender to secure a 4.25% fixed rate. While this was higher than the original locked rate, it was well below the current market rate.

    Rate: 4.25% Fixed
    Term: 2 Years, with 1-Year Extension Option
    LTV: 55%
    Amortization: Interest-Only
    Prepayment: 1%, 0%
    Guaranty: Non-Recourse

  • Expand

    $2,083,000 Cash-Out Refinance of a 44 Unit-Multifamily Property; Dallas-Fort Worth, TX

    April 20, 2022

    Transaction Description:

    George Smith Partners secured a $2,083,000 agency loan for the cash-out refinance of a stabilized 44-unit multifamily property located in Dallas-Fort Worth, TX. GSP used its relationship with a capital provider whom we had closed multiple loans with. This lender recently closed a similar loan in this market. They understood the market and felt comfortable with the market characteristics. The Sponsor recently completed exterior and interior renovations including common area upgrades. The recent improvements allowed the Sponsor to increase rents thus increasing the value of the Property. GSP was able to provide the Sponsor with a 7-year term and a flexible prepayment structure equal to 5%, 5%, 4%, 4%, 3%, 2%, 1%. The loan structure allows the Sponsor to refinance out of an expensive loan with a fixed rate of 3.38%, while also receiving cash out. The Sponsor is using cash-out proceeds to continue their business plan of purchasing and renovating additional properties. Thanks to our long-standing relationship with this Lender, GSP was able to meet the Sponsors deadline and close this transaction within 60 days from signing the term sheet.

    Rate: 3.38%
    Term: 7 Years
    LTV: 65%
    Amortization: 30 Years
    Prepayment: 5%, 5%, 4%, 4%, 3%, 2%, 1%

  • Expand

    $15,100,000 Cash-Out Refinance of a 5-Property Multifamily Portfolio at 3.40% – 70% LTV; Los Angeles, CA

    April 11, 2022

    Transaction Description:

    George Smith Partners arranged $15,100,000 in permanent financing for the refinance of a 5-property multifamily portfolio located in Los Angeles, CA. Using GSP’s vast network of relationships, we were able to source and quickly lock fixed rate financing in a market that is seeing rising interest rates. The Sponsor also wanted to pull cash out of their existing multifamily portfolio to use as equity towards purchasing new properties. The Sponsor had recently completed exterior and interior renovations including common area upgrades to all five properties. The recent improvements allowed the Sponsor to increase rents thus increasing the value of the Property. GSP was able to provide the Sponsor with a 30-year term, with the first 5 years being fixed at a rate of 3.40%. The loan represents 70% loan to value with a minimum 1.20 DSCR. The flexible stepdown prepayment structure is equal to 5,4,3,2,1. The cash-out loan allows the Sponsor to use more equity towards growing their multifamily portfolio. Thanks to GSP’s long-standing relationship with this bank lender, we were able to meet the Sponsors deadline and close this transaction within 35 days from signing the term sheet.

    Rate: 3.40%
    Term: 30 years term, fixed for first 5 years
    LTV: 60%
    DCR: 1.20

  • Expand

    $47,000,000 Senior Construction Loan for a Mixed-Use Development; Azusa, CA

    April 11, 2022

    Transaction Description:

    George Smith Partners placed a $47,000,000 senior construction loan for the ground-up development of a mixed-use project in Azusa, CA. When complete, the 5-story project will consist of 127 apartment units and approximately 10,000 SF of 1st-floor commercial/retail/restaurant space. The Project is an integral component in the ongoing expansion of the City of Azusa’s Downtown district and is immediately adjacent to the Gold Line Station, which runs from Azusa Pacific University & Citrus College west to Downtown Los Angeles. This is the Sponsor’s second project in Azusa.

    A lack of comparable projects within the submarket posed a challenge. GSP emphasized the supporting employment centers inside a ten-mile radius, including the two colleges and eighteen medical facilities. In addition, a detailed breakdown of the San Gabriel Valley (SGV) submarket helped showcase the presence of a proportionally higher share of younger households than statewide. Data depicting home values that had grown out of reach for those living in a three-mile radius helped the case for a rental project. Further support was provided by the SGV submarket experiencing minor economic impact during the last two years and during Covid.

    GSP executed a full-time marketing campaign and identified the most economically beneficial capital stack scenario for the sponsorship with a stepdown in rate at Temporary Certificate of Occupancy (TCO).

    Rate: Floating rate (SOFR-based) with rate stepdown at TCO
    Term: 36 Months + Two, 12-month Extensions
    Stabilized Loan-To-Value: 70%
    Loan-To-Cost: 85%
    Guaranty: Non-Recourse

  • Expand

    4,450,000 Cash Out Refinance Loan For 37-Unit Multifamily Property in Los Angeles, CA; 7 Years Fixed at 3.40%; 5 Years Interest Only Payments

    April 6, 2022

    Transaction Description:

    George Smith Partners arranged $4,450,000 in financing for the refinance of a stabilized 37-unit mixed use property located in Los Angeles, California. The loan is fixed at a rate of 3.40% for 7 years. The new financing is a takeout of the acquisition loan that GSP closed five years earlier. Over the course of their ownership, the Sponsor performed a renovation of the Property and substantially increased the net operating income. As a result, the new loan provided a significant return of equity. The Lender held the rate of 3.40% even though interest rates increased while the loan was in application. Full credit was given for the income from two ground floor retail tenants. The loan has 5 years of interest-only payments.

    Rate: Fixed at 3.40% for 7 years
    Term: 7 years
    Amortization: 5 Years Interest Only
    Prepayment Penalty: 5,4,3,2,1%
    Guaranty: Non-Recourse

  • Expand

    Highly Leveraged, Quick Close Acquisition of $2,335,000 for 10-Unit Multifamily Property; West Adams – Los Angeles, CA

    March 30, 2022

    Transaction Description

    The Sponsor approached George Smith Partners for highly leveraged (80% Loan-to-Purchase), quick purchase financing. GSP secured this financing which allowed the Sponsor to purchase the 10-unit multi-family property well below the market value. Although the Property is currently 100% occupied, rents were below market because the Seller self-managed and the Property needs exterior and interior improvements. GSP arranged a $2,335,000 in non-recourse financing for the acquisition. The loan was structured with a first trust deed from a debt fund as well as a preferred equity B piece. There’s additional flexibility for the Sponsor because there is no prepayment penalty. This loan structure allows the Sponsor to implement their business plan of renovating units, increasing rents, and refinancing into a permanent loan within a few months. The non-recourse facility was priced at an interest-only fixed rate with a blended rate of 8.05% with a 12-month term plus a 6-month extension. Thanks to GSP’s long-standing relationship with this debt fund and preferred equity investor, we were able to close this transaction in less than 10 days from signing the term sheet.

    Blended Rate: 8.05%
    Term: 12-months plus a one 6-month extension
    Loan-to-purchase: 80%
    Prepayment Penalty: None

  • Expand

    $102,000,000 Non-Recourse Bridge Financing for an Ultra-Luxury 37-Unit Multifamily Asset; West Hollywood, CA

    March 30, 2022

    Transaction Description:

    George Smith Partners successfully arranged $102,000,000 (approx. $2.75M/unit) in non-recourse, bridge financing for a 37-unit, ultra-luxury apartment building located in the heart of West Hollywood. The fully condo-mapped project features hotel-level service and amenities including daily breakfast, airport drop-off, wellness classes, cooking classes, wine tastings, entertainment lounge, private dining room & kitchen, screening room, fitness center, yoga studio and a leather-paneled bowling alley. The asset boasts some of the highest rental rates on the West Coast.

    Located in one of Los Angeles’ most coveted retail and residential neighborhoods, this trophy asset caters to wealthy residents seeking an amenity-rich community with minimal maintenance and maximal convenience. The best-in-class Sponsor recognized the investment potential of an ultra-luxury product in a prized location—the revered “pumpkin patch” site in West Hollywood. In working with potential lenders for this financing, GSP was able to identify a capital provider who not only understood the as-is value and in-place cash flow of the operating multifamily asset, but also the potential future value as 37 individual high-end condos. The loan closed in 50 days from application.

    All Terms Confidential

  • Expand

    $4,400,000 Acquisition Financing Loan for 19-Unit, Multifamily Property; Los Angeles, CA

    March 22, 2022

    Transaction Description:

    George Smith Partners arranged $4,400,000 in permanent financing for the acquisition of a stabilized 19-unit multifamily property located in Los Angeles, CA. GSP was simultaneously helping the Sponsor close on a few multifamily refinances within their portfolio to pull cash out and use as equity for the Subject property. Although the Property is currently 100% occupied, rents were below market because the Seller self-managed and the Property needs exterior and interior improvements. The Sponsor wanted to lock in a low rate to allow for additional cashflow to be used towards building upgrades. Despite being on a strict closing deadline, GSP was able to identify a bank lender who could close within 45 days. The loan represents 70% of the purchase price and was structured with the first 5 years being fixed at 3.15%, while resetting every 5 years for the rest of the 30-year term. The loan structure also allows for flexible prepayment with the first 3 years being equal to 1.75% and 1% thereafter. The prepayment flexibility will allow the Sponsor to cash-out refinance once they have implemented their value-add strategy. The renovation plan will improve the Property appearance and support the overall business plan of increasing market rents and value. The new capital allows the Sponsor to expand their multi-family portfolio.

    Rate: 3.15%
    Term: 30 years term, fixed for first 5 years, resets every 5 years after for the term
    LTV: 70%
    DCR: 1.20