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Financings

Recent Financings

  • Perm Debt – 1.20x DSCR & 3-Years Interest Only – Stabilized Multifamily, Los Angeles, CA

    April 7, 2021

    Transaction Description:

    George Smith Partners secured senior permanent financing for a stabilized multifamily property located in the Pico Robertson neighborhood of Los Angeles, CA. The non-recourse debt was utilized to complete the acquisition of the multifamily asset. The loan was structured with a 5-year term and interest only payments for the initial 3-years followed by a 30-year amortization schedule. The loan was collateralized by a Class B, three story, 16-Unit multifamily property. The Subject was 100% leased at closing but only 78% physically occupied.

    GSP selected a bank lender that was able to underwrite the income from three newly executed leases with no seasoning. The Lender funded the full proceeds with signed leases and rent checks although the tenants had yet to take possession. The Lender executed on excellent terms while closing on a firm acquisition deadline of 45 days. At application, the Lender offered an early rate lock to remove any pricing risk. GSP worked with the Lender to navigate the appraisal assumptions surrounding concessions and market rent stemming from various COVID risks while maximizing proceeds.

    Rate: 3.40%
    Term: 5 years
    Max LTV: 65%
    Min DCR: 1.20x
    Amortization: 3-Years Interest Only, 30-Year Schedule thereafter.
    Origination Fee: Par
    Prepayment: 3, 1, 1, 1
    Guaranty: Non-Recourse

  • $7,750,000 Non-Recourse Bridge-to-Agency Refinance for a 36-Unit Recently Completed Multifamily Building; Tujunga, CA

    April 7, 2021

    Transaction Description:

    George Smith Partners arranged $7,750,000 in non-recourse financing for the lease-up and stabilization of a newly constructed 36-unit multifamily building located in Tujunga, CA. The Sponsor had just received the Property’s Certificate of Occupancy and wanted to lower the interest rate from the existing construction lender. This financing allows the Sponsor to finish the lease up of the Property, stabilize the asset, and exit the loan with long-term agency financing. The financing was $700,000 more than the construction loan and the extra proceeds were used to pay for cost overruns and build a larger interest reserve required for the slower lease up due to COVID. The Lender will cut their minimum required hold and exit fee after month seven if the Sponsor exits into an Agency loan with the Bridge Lender.

    Rate: LIBOR + 3.75%
    Term: 18 Months
    Amortization: Full Term Interest Only
    LTV: 75%
    LTC: 78%
    Prepayment: 9 Months
    Guaranty: Non-Recourse

  • $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

  • $7,685,000 Senior Construction Financing for a Mid-Developed Construction Building; Los Angeles, CA

    March 31, 2021

    Transaction Description:

    George Smith Partners secured a $7,685,000 construction loan for the completion of a development project in Los Angeles, California. The construction project was being fully paid out of pocket and had just finished two levels of subterranean parking. At this point of completion, the Sponsors decided to finance the remaining project costs instead of coming out of pocket the rest of the way. Many lenders didn’t want to finance the Project due to the mid-construction risk and those that did wanted some sort of banking relationship/deposit to come with the Project. GSP secured a capital source that was comfortable with the mid-construction project and didn’t require the Sponsors to bring in any fresh equity nor did they require any banking deposits.

    Rate: 5.50%
    Term: 24 months + two 6-month options to extend
    Amortization: Interest Only
    LTC: 55%
    Guaranty: Full recourse

  • $5,376,000 (60% LTC) Bridge Loan for Cash-Out Refinance of Industrial Building; Northern California

    March 24, 2021

    Transaction Description:

    George Smith Partners secured $5,376,000 of bridge financing for the refinance of a two-tenant industrial building in Fairfield, CA. The Property is favorably located within a mile of three major freeways and is only a 45-minute drive to both San Francisco and Sacramento. The building is currently 100% occupied, but there were cash-out proceeds required to reposition the Property to make it more attractive to potential buyers. The 26,000 SF building also has 95,000 SF of improved yard space adjacent, which is a major draw for the current tenants. GSP was able to secure a lender that could get comfortable with a majority of the income being derived from the yard space. The financing was comprised of a senior and a mezzanine loan. The blended terms provided a 60% LTC priced at 7.43% with a 1.20% origination fee. The 12-month terms provide the Sponsor the ability to execute his business plan.

    Blended Rate: 7.43% Fixed
    Term: 12 Months
    Amortization: Interest Only
    LTV: 60%
    Loan Fee: 1.20%
    Reserves: None
    Prepayment Penalty: None
    Guaranty: Non-Recourse for Senior / Recourse for Mezzanine Loan

  • Perm Debt – 10-Years Interest Only – Stabilized Multifamily; Los Angeles, CA

    March 24, 2021

    Transaction Description:

    George Smith Partners secured senior permanent financing for a stabilized multifamily property in Los Angeles, CA. The non-recourse debt totaling $12,300,000 was utilized to refinance existing debt and return equity to the Ownership. The loan was structured with a 10-year term and interest only payments for the full duration. The loan was collateralized by a Class-A 34-Unit multifamily building, the Subject was 94% leased at closing and located in a highly desirable West Los Angeles neighborhood.

    GSP selected a lender that was able to refinance the Sponsor’s existing debt, cover prepayment penalties and return a significant amount of equity to the Borrower, while simultaneously locking in interest only payments for the next ten years at a very desirable rate. GSP worked with the Lender to minimize debt service reserves while addressing Lender concerns for potential COVID related shortfalls; cash-out proceeds were secured on the loan despite several COVID related delinquencies.

    Rate: 3.43%
    Term: 10 years
    Max LTV: 65%
    Min DCR: 1.35x
    Amortization: None; 10-Years Interest Only
    Origination Fee: Par
    Prepayment: Yield Maintenance

  • Highly Leveraged, Quick Close Acquisition Capital of $847,000 for 4-Unit Multifamily Property; El Monte, CA

    March 17, 2021

    Transaction Description:

    George Smith Partners was approached to obtain high leveraged quick purchase financing. The Sponsor had the opportunity to purchase a quadruplex well below market value because of his ability to close quickly with an 80% LTC quick-close loan. GSP arranged this non-recourse acquisition financing. The Property is currently 100% occupied. Rents are below market due to the need for exterior and interior improvements. 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 9.14% with a 12-month term plus a 6-month extension. Thanks to our long-standing relationship with this debt fund and preferred equity investor, GSP was able to close this transaction in less than 5 days from signing the term sheet.

    Blended Rate: 9.14%
    Term: 12-month Bridge Loan plus a one 6-month extension
    Loan-to-purchase: 80%
    Prepayment Penalty: None

  • $4,600,000 Cash Out Refinance of 38 Unit Multifamily Property; Fixed at 3.30% for 5 Years; Seattle, WA

    March 17, 2021

    Transaction Description:

    George Smith Partners secured $4,600,000 in proceeds for the cash-out refinance of a 38-unit multifamily property located near Seattle, WA. The Borrower has completed a value-add business plan over the past two years. The Lender gave full credit for the newly signed leases and higher net operating income at the Property. Only one month of stabilized operating history was required to underwrite to the in-place income. Proceeds were maximized by applying the debt coverage ratio constraint to the actual note rate, rather than using a higher underwriting rate.

    The previous loan was originated during a cyclical peak in interest rates and carried a note rate of 4.70%. The new refinance loan lowered the Borrower’s interest rate by 140 basis points while simultaneously providing a return of equity. Fixed at 3.30% for five years, the first three years are interest only before rolling into a 30-year amortization schedule.

     

    Rate: 3.30% fixed for 5 years, then floating at 1-year CMT + 2.75%
    Term: 10 years
    Amortization: 3 years Interest Only followed by 30-year amortization
    Prepayment Penalty: 3,2,1,1,1%
    LTV: 70%
    DCR: 1.25x
    Guaranty: Non-Recourse

  • Quick Close, Cash-Out Financing for a 2-Property Portfolio, in Los Angeles, CA

    March 10, 2021

    Transaction Description:

    George Smith Partners arranged $800,000 in cash-out financing for a two-property office and retail portfolio located in Los Angeles, CA. The Sponsor retained GSP to quickly pull equity out of debt-free properties and use the proceeds towards purchasing and renovating additional properties. GSP selected a debt fund that was able to move quickly to accommodate the Borrower’s timeline. This was a quick way to access funds without selling any stocks or other holdings. The Lender’s credit department approved the loan three days post submission and did not require an appraisal to close. The non-recourse facility was priced at an interest only fixed rate of 7.90% with a 12-month term, plus a 6-month extension option. With no prepayment, this facility provides additional flexibility to the Borrower, allowing for the Borrower to refinance into a permanent loan at a lower rate. Despite being on a strict closing deadline, GSP was able to close the loan within 7 days of signing the term sheet.

    Rate: 7.90%
    Term: 12-month Bridge Loan plus 6-month extension option
    LTV: 60%
    Prepayment Penalty: None

  • $4,900,000 Single Tenant Tertiary Market Office Refinance; Illinois

    March 10, 2021

    Transaction Description:

    George Smith Partners placed the rate and term refinance of a net-leased single tenant office building located in a tertiary Illinois market. Constructed in 1999, the 88,000 square foot asset is used as a training facility and call center leased to an investment grade tenant. Although this Tenant has been in occupancy for over 20 years, only four years remain on their current lease term. Despite the pending lease event risk, there are no holdbacks or cash flow sweeps. The tenant recently completed a $5,000,000 cosmetic upgrade and continued to operate in a reduced capacity throughout COVID. Value and DCR constraints were not a concern as our Sponsor was not seeking a return of equity and only sought to replace the pending loan maturity debt. The 10-year term is fixed at 3.625% and amortizes over 25 years. This generated a much lower mortgage constant that substantially improves net cash flow after debt service.

    Rate: 3.625% fixed
    Term: 10 Years
    Amortization: 25 Years
    LTV: 70%
    DCR: 1.20
    Loan Fee: 1 Point
    Reserves: None
    Impounds: None
    Prepayment Penalty: None
    Recourse: Repayment Guarantee

  • 70% Acquisition Financing of $1,036,000 for 9-Unit, Multifamily Property; Koreatown area of Los Angeles, CA

    March 3, 2021

    Transaction Description:

    George Smith Partners arranged $1,036,000 in permanent financing for the acquisition of a stabilized 9-unit multifamily property located in Los Angeles, CA. Simultaneously, GSP was 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 3.25%, 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.

    Rate: 3.25%
    Term: 30 years term, fixed for first 5 years, resets every 5 years after for the term
    LTV: 70%
    DCR: 1.20
    Prepayment: 1.75% for first 3 years, 1% thereafter

  • $7,500,000 Preferred Equity Investment to 83% LTC at a 4.94% blended coupon for the Ground-Up Development of a Class-A Multifamily Project; Saint Louis, MO

    March 3, 2021

    Transaction Description:

    George Smith Partners successfully placed $7,500,000 in preferred equity with last dollar exposure of 83% loan-to-cost ($222,000/unit) for the ground-up construction of a 205-unit, class-A apartment project in an irreplaceable location within the Central West End submarket of Saint Louis, Missouri. The preferred equity investment priced at 12.25% was sourced during the COVID-19 pandemic through an east coast real estate investment management company. GSP worked with the Sponsor to tailor a capitalization that increased leverage to a reasonable level above the 70% loan-to-cost senior loan, reduced overall project costs through minimizing the preferred return current pay portion, mitigated sponsorship risk through negotiated performance hurdles, and was highly accretive to common equity returns. Although the preferred equity investment was made during height of COVID-19 safer-at-home orders, the investor’s concerns were mitigated through the institutional sponsor’s local experience, market, and submarket performance during the pandemic, and strong project fundamentals.

    Rate: 12.25%
    Fee: 1% origination fee
    Term: 36 months with two, 12-month extension options
    Amortization: I/O
    Prepayment: Open in whole or in part at any time with a two-year minimum yield
    Guarantee: None