multifamily

Transaction Description:

George Smith Partners placed a $11,350,000 loan for the refinance of a 60-unit historic multifamily property in Downtown Los Angeles. The loan request was started in Q4 of 2022 when many banks had stopped lending after reaching their full allocation for the year. As a result, GSP engaged in an extensive marketing process that included over 30 lenders. A California-based credit union was sourced that quoted a rate of 5.62%. The lender used a 1.20x DCR and underwrote to the start rate of the loan. This resulted in proceeds of $1.0MM more than several other lenders. During the closing process, the 3-year Treasury temporarily dropped, and the lender re-quoted the rate at 5.34%.

Transaction Description:

George Smith Partners secured $46,000,000 for the refinance of two multifamily properties located in Houston, Texas. Despite the properties being a few months away from stabilization, we secured a 3-year permanent loan instead of a higher-cost bridge loan to pull cash out to the Sponsor at a cheaper rate. We were able to negotiate a favorable prepayment penalty so the Sponsor could pull more capital out in 18 months.

The Sponsor’s original bridge loan that was completed in 2019 was priced at LIBOR + 4.75%, so with rates increasing, their all-in rate was over 9%. The Sponsor had completed 80% of the unit improvements and 100% of the exterior upgrades, but because of COVID, they are about 20% below the target NOI.

GSP utilized its relationships and experience to structure a loan that would be affordable, and most importantly fixed-rate in this increasing rate environment. Overall, the Sponsor was extremely happy with the refinance which allowed them both a fixed low rate and flexibility for the future.

Transaction Description:

George Smith Partners successfully closed a 1st and 2nd Trust Deed at 85% of the purchase price for unentitled land in the Koreatown neighborhood of Los Angeles, CA. The two loans have a blended rate of 9.98% for the twelve-month initial term. The Sponsor will have a six-month extension option available. GSP was able to identify two lending sources, to maximize leverage, who understood the market and the demand for multifamily development in this location.

Transaction Description:

George Smith Partners arranged $3,800,000 in permanent financing for the refinance of a stabilized 39-unit multifamily property in Los Angeles, California. The Sponsor locked rate in early summer of 2022 during a time of rapidly increasing interest rates. Due to some unforeseen events, the transaction got delayed multiple times. GSP was able to get the rate lock extended multiple times due to our relationship with the Capital Provider. The rate lock was extended without a single increase to the rate or any additional fees. The loan includes a flexible prepayment penalty structure that allows the Sponsor plenty of options during the next 5 years as well as over $1,500,000 in cash-out proceeds.

Transaction Description:

George Smith Partners arranged $3,830,000 in permanent financing on a newly stabilized 11-unit multifamily property located in Austin, TX. The loan is fixed at a rate of 6.00% for 10 years and a 3-3-3-2-1 prepayment structure. Although some lenders were hesitant to provide competitive permanent financing terms on a former condo multifamily property with less than a year of operating history, GSP was able to source competitive financing ahead of the rising interest rate environment with flexible prepayment. Thanks to our long-standing relationship with this repeat lending relationship, GSP was able to meet the Sponsor’s deadline and close this transaction within 43 days from signing the term sheet.

Transaction Description:

George Smith Partners arranged permanent financing for the refinance of a stabilized 12-unit multifamily property in Los Angeles, California. The Sponsor finished construction on the Property in the middle of the current rate hike cycle. GSP identified a Capital Provider who allowed an early rate lock before Certificate of Occupancy was issued. The Lender allowed the borrower to go into application with very little lease up, but with the understanding that the property would be stabilized by closing. Although the closing took slightly longer than the 60 day term of the rate lock, the Lender held the rate for no additional charge. The bank did not require deposits to be held at their branch except for the subject property’s operating account.

Transaction Description:

George Smith Partners successfully placed a $25,000,000 bridge loan for the acquisition and renovation of a 200-unit, 1970 vintage apartment community in Irving, Texas. GSP sourced a Lender that was able to maximize proceeds while providing future capital expenditure funding for the sponsor. The loan was sized to 74.1% of As-Is Value and includes future fundings for 100% of the capital improvements and unit renovations. The Sponsor plans on renovating approximately 75% of the units within the initial 3-year loan term.

The lender prices over 30-Day Average SOFR, as opposed to the more common 30-Day Term SOFR. The average SOFR is based on the preceding 30 days rather than the upcoming 30 days and is 60 bps lower in today’s rising rate environment.

Transaction Description:

George Smith Partners arranged $2,250,000 in permanent financing for the acquisition of a stabilized 12-unit multifamily property in Los Angeles, California. The Sponsor acquired the Property as interest rates were soaring and as the environment was changing drastically with the Fed raising rates. GSP identified a Capital Provider who allowed an early rate lock, required no holdbacks of any kind, no deposits to be held at their branch, and provided an extremely flexible prepayment penalty structure. This allows the Sponsor plenty of options during the next 5 years at an aggressive rate.

Transaction Description:

George Smith Partners is pleased to announce the arrangement of $23,750,000 of LP JV-Equity for the ground-up construction of a 155-unit build-for-rent community in Loudon County, Virginia. The Sponsor originally engaged GSP to capitalize the land from purchase to finalization of the site plan that would be sold to a homebuilder. As headwinds from rising interest rates started affecting homebuilders’ price indications, the Sponsor decided to pivot into developing all 155 units as rental units with a Limited Partner. Through GSP’s deep relationships and the Sponsor’s expertise in development, the transaction changed in scope and direction ending in a great partnership and transaction for the Sponsor.

Transaction Description:

George Smith Partners secured cash-out refinance loans totaling $20,950,000 for 3 stabilized Los Angeles multifamily properties. The properties comprise a total of 145 units. The loans are fixed at 4.25% for 5 years and have at least 4 years of Interest Only payments. The lender gave the borrower full credit for income sources that had recently increased, including parking and utility reimbursements. Annualizing the most recent months of collections resulted in higher loan proceeds. A 60-day rate lock was signed at application. Since market interest rates increased by over 50 basis points while the loan was application, this provided a substantial benefit to the borrower. Although the closing process took longer than 60 days, the lender extended the rate lock for no charge.

Transaction Description:

George Smith Partners successfully arranged $57,900,000 in non-recourse, construction financing for a mid-rise, Class A, 187-unit multifamily development in Tempe, AZ. The Project will serve the rapidly developing area of north Tempe. The Property is located immediately adjacent to a Valley Metro light rail stop, offering residents convenient access to Downtown Tempe, Arizona State University, Sky Harbor Airport, and downtown Phoenix.

The Sponsor, headquartered in nearby Scottsdale with a successful track record of multifamily and commercial developments, engaged GSP in 2020 to source high-leverage, non-recourse financing. Despite being relatively early in the Project’s development stage, GSP sourced a Lender offering a 90% LTC loan, which includes a participating feature. This unique structure features the Lender sharing profits with the Sponsor in exchange for the high leverage financing.

The construction budget grew significantly during the longer than expected entitlement and permitting process. Fortunately, thanks to GSP’s close relationship with the Lender, a commensurate increase in market rents, and the strength of the Sponsor, the final loan amount was nearly 40% higher than that of the original loan application in 2021.

Transaction Description:

George Smith Partners has secured $120,115,000 in permanent financing for a 526-unit multifamily property, the Da Vinci Apartments. The Property is a 98% occupied, institutional quality, 5 and 6-story residential complex located in Downtown Los Angeles. The loan is fixed for 10 years at 4.38% with interest-only payments for the first 7 years.

Despite Los Angeles’ COVID-based eviction and rent control issues, GSP was able to work with the Lender to underwrite the NOI to accomplish the targeted loan amount. GSP also facilitated an early rate lock to protect against changes in the interest rate prior to the loan’s closing.