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multifamily

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    $4,200,000 Refinance of Luxury Condominium; Beverly Hills Adjacent, CA

    November 29, 2021

    Transaction Description:

    George Smith Partners arranged a $4,200,000 loan collateralized by a three-story, luxury condominium located adjacent to Beverly Hills, CA. The Property had three recorded notes with the 2nd trust deed already in maturity default. GSP used its strong lender relationships to source a quick close solution to refinance two of the three notes with a new short-term loan that required the 3rd trust deed to subordinate to the new lender.

    Rate: 6.4% Fixed, Interest-Only
    Term: 1 Year
    LTV: 63%
    Prepayment: None
    Guaranty: Non-Recourse
    Lender Fee: 1%

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    $13,469,000 Refinance of 61-Unit “Broken Condo”, 6.5% Debt Yield, 7 Years Interest-Only; Oceanside, CA

    November 23, 2021

    Transaction Description:

    George Smith Partners secured a $13,469,000 first mortgage for a 61-unit multifamily “broken-condominium” located in Oceanside, CA. The 61 garden style apartment units are a part of a larger 72-unit project which was originally built in 1972 and was mapped for condominiums in the mid-2000’s. Each of the 72 units were then upgraded and listed for sale to individual buyers in 2006. The original developer sold 11 units, the last of which closed escrow in early 2008.

    Due to housing market conditions, the remaining 61 units were converted back to for-rent apartments and purchased by the current Sponsor in 2008 (after extensive renovation in 2006). Since the acquisition, the Sponsor has kept occupancy rates at or above market levels (currently 100% occupied) and has maintained the Property with necessary capital improvements over the years. With strong property management, the Sponsor has been able to keep tenant turnover at a minimum and as a result stabilized the Property cash flows. The non-recourse financing is fixed at a 3.52%, full term interest-only, 7-year term. The 60% LTV financing provided a return of all initial equity invested.

    Rate: 3.52% Fixed
    Term: 7 Years
    Interest-Only: 7 Years
    LTV: 60%
    Debt Yield: 6.5%
    Guaranty: Non-Recourse

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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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    $9,882,000 Refinance for 32-Unit Multifamily Property, 3.49% For 10 Years, 6 Years Interest-Only; Los Angeles, CA

    November 17, 2021

    Transaction Description:

    George Smith Partners secured $9,882,000 in proceeds for the refinance of a newly stabilized 32-unit property in the Palms neighborhood of Los Angeles. The loan is fixed at a rate of 3.49% for 10 years, with 6 years of interest-only payments. The loan is non-recourse and has no payment reserves.

    Several challenges were encountered when discussing the transaction with capital providers. The Property had just reached stabilization, so GSP had to find a lender that would include the income from newly signed leases without requiring several months of operating history. The Sponsor desired to lock their low rate for 10 years. This eliminated bank financing as an option because banks price up for longer term loans. Some CMBS lenders offered very competitive rates, but the Sponsor wanted an easy and low-cost closing process. As a result, Agency financing was the best option for a 10-year fixed rate loan with partial term on interest-only payments. While in application, extensive data from comparable properties was used to support proforma expenses and maintain underwritten cash flow. The loan closed in about 60 days.

    Rate: 3.49% fixed for 10 years
    Amortization: 6 years Interest Only followed by 30 year amortization
    Prepayment Penalty: Yield Maintenance
    LTV: 65%
    DCR: 1.25x
    Guaranty: Non-Recourse

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    $14,000,000 Cash-Out Refinance of a 4-Property Multifamily Portfolio at 3.15%,70% LTV; Los Angeles, CA

    November 10, 2021

    Transaction Description:

    George Smith Partners arranged $14,000,000 in cash-out permanent financing,70% LTV for the refinance of a 4-property multifamily portfolio located in Los Angeles, CA. Due to GSP’s vast activity, we were able to time the loans to match up with a special discount program offered by a regional lender. GSP structured the portfolio to maximize the cash-out to the Sponsor at the lowest possible cost. With over $3,000,000 in cash out, the Sponsor still lowered their monthly debt service. GSP was able to arrange a 30-year term with the first 5 years fixed at a rate of 3.15%. The rate will then reset every 5 years for the remainder of the term. The flexible prepayment structure is equal to 1.75% for the first 3 years, 1% for years 4 and 5, and 0% thereafter. The cash-out financing provides the Sponsor with equity allowing them to continue to grow their multifamily portfolio. GSP was able to meet the Sponsor’s deadline and close this transaction within 40 days from signing the term sheet.

    Rate: 3.15%
    Term: 30 years term, fixed for first 5 years, resets every 5 years after for the term.
    LTV: 70%
    DCR: 1.15

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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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    $10,000,000 Acquisition Loan to Purchase Hotel for Multifamily Conversion; Mountain States

    November 3, 2021

    Transaction Description:

    George Smith Partners successfully brokered both the sale and acquisition financing for an extended stay hotel conversion located in the Mountain States region. The Seller, initially intending to undertake the Project, engaged GSP to source bridge financing for the 126-apartment conversion. Most of the conversion will be cosmetic changing the feel from hotel to residential. The hotel had been closed due to COVID, but the Sponsor needed to cancel the Management Agreement with the Operator and vacate the hotel. Because the hotel was in foreclosure, the Seller put the asset in bankruptcy before the trustee sale. This complicated the transaction and resulted in closing the deal two weeks from court approval.

    GSP found a buyer with experience in hotel conversions who understood the Property’s value proposition and the bankruptcy process. With limited time, GSP represented the Sponsor in sourcing $10,000,000 of 3-month Gap financing for the purchase while concurrently working on inexpensive bridge financing. No appraisal was required for the Gap loan. This was an extremely complicated financing with exceptionally short time constraints. GSP was able to serve the needs of both Buyer and Seller and successfully secure financing.

    Rate: 7.95%
    Term: 3 Months
    LTV: 68% Loan to Purchase Price
    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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    $11,300,000 Acquisition Bridge Loan for 76-Unit Multifamily Property, 70% LTC, 6.5% Stabilized Debt Yield; Salt Lake City, UT

    October 27, 2021

    Transaction Description:

    George Smith Partners secured $11,300,000 in proceeds for the acquisition of a 76-unit multifamily property in a tertiary market outside of Salt Lake City, UT. The bridge loan is structured as $10,795,000 at close and $505,000 in future funding. The fully funded proceeds represent 70% LTC. The loan floats at a rate of LIBOR + 3.15% with a 0.10% floor on LIBOR.

    GSP encountered several challenges when discussing the deal with capital providers. Some lenders quoted a spread as high as 3.65% over LIBOR. Other lenders quoted proceeds less than $10,000,000 because they require a 7.5% exit debt yield. Some lenders considered the market to be too small.

    GSP was able to source a lender that provided very competitive pricing, an exit debt yield of only 6.50%, and an easy close process. The loan closed in about 60 days without any changes to the signed term sheet.

    Rate: Floating at LIBOR+3.15% with a 0.10% LIBOR floor
    Term: 2+1+1+1
    LTV: 71% in/67.5% stabilized
    LTC: 70%
    Debt Yield: 4.75% in/6.50% out
    Guaranty: Non-Recourse

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    $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

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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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    $35,000,000 Bridge Financing Secured for Hotel-to-Micro Apartment Conversion; Salt Lake City, UT

    October 6, 2021

    Transaction Description:

    George Smith Partners successfully arranged a $35,200,000 construction financing for the first phase of a hotel-to-multifamily repositioning and transformation in downtown Salt Lake City’s trendy Granary District. The financing capitalized renovation costs related to the adaptive reuse of the iconic property’s south tower with plans to transform it into a 184-micro unit multifamily asset with boutique-quality amenities. The Project’s north tower is planned to be renovated as part of a future phase.

    Located on a coveted 5-acre site, the Project offers approximately 2.7 acres of excess development land, allowing for the future mixed-use infill opportunities onsite.

    The Sponsorship team acquired the former hotel with visions of redevelopment in December 2019, creating a unique opportunity for a transformative mixed-use asset in Salt Lake City’s employment and social epicenter. GSP was able to identify a top-tier lender who not only understood the current demand for multifamily housing in Salt Lake City’s urban core, but also understood the significant value and future opportunity afforded by the excess developable land.

    All Terms Confidential