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

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

Subscribe Here

Financings

Recent Financings

  • $3,700,000 Highly Leveraged, Quick Close Acquisition Capital for 97-Unit, Multifamily Property; Oklahoma City, OK

    September 22, 2021

    Transaction Description:

    George Smith Partners secured $3,700,000 for an acquisition of a multifamily property in Oklahoma City, OK. The Sponsor had the opportunity to purchase a well-located, value-add property in Oklahoma City. By utilizing a quick close loan, the Sponsor was able to negotiate a below market price. The Sponsor approached GSP to help arrange a loan that needed to close on a strict timeline of only one week. Because of the quick timing and the short-term distress in the cash flow, the Property would not qualify for bank or agency financing. The Property rents were below market because the Seller self-managed and the Property needs exterior and interior improvements. The loan was structured with a CapEx holdback to allow the Sponsor to implement their value-add strategy. The non-recourse facility represents 75% of total cost and was priced at an interest-only fixed rate of 7.25% with a 12-month term plus two 6-month extension options. The interest-only loan allows for more property cash flow to be used towards improving the Property. Thanks to GSP’s long-standing relationship with this debt fund, we were able to close this transaction in less than 7 days from signing the term sheet.

    Rate: 7.25%
    Amortization: Interest-Only
    Term: 1 Year + Two 6-Month extensions
    LTC: 75%

  • $15,400,000 Note-On-Note Financing for a Class-A, Self-Storage Facility; Major Southwest Metro

    September 22, 2021

    Transaction Description:

    George Smith Partners successfully arranged $15,400,000 in note-on-note financing for a newly constructed Class-A, self-storage facility in a major Southwest metropolitan market. The financing was obtained for a prominent national debt fund and proved extremely accretive, due to an attractive advance rate and pricing. GSP leveraged its extensive lending network and was able to identify a premier note-on-note lender with an extensive book of business in both the note-on-note space and credit facility space. The note-on-note Lender understood the strength of the debt fund platform it was financing and the strong underlying loan. The financing has the potential to grow into a larger credit facility for the debt fund and A-Note lender over time.

    All Terms Confidential

  • $9,542,000 Take-Out Refinance of Owner-User, Flex Creative Office & Warehouse; Los Angeles, CA

    September 15, 2021

    Transaction Description:

    George Smith Partners successfully arranged a take-out loan of $9,542,000 for a recently renovated, two-story, flex property just south of downtown Los Angeles. The total collateral consists of a 40,417 SF building and three separate surface parking lots totaling 86 spaces. The Sponsor, a repeat client, acquired the Property two years ago as part of a three-property portfolio that GSP arranged the financing for. Those proceeds were used to complete an adaptive reuse of this former industrial building into creative office and warehouse. The Sponsor moved its headquarters to this location and occupies over half of the space. The remaining units for lease attract tenants priced out of the more expensive downtown LA and Culver City areas.

    There were significant challenges during the construction period, including a total loss fire on one of the properties within the acquired portfolio, the impact of COVID-19 on the Sponsor’s businesses and a maturing loan with the acquisition lender. GSP leveraged its strong relationships and financing expertise to work out extension and repayment solutions with the existing lender while identifying a new capital source to provide favorable terms for owner-user financing. The loan amount turned out to be well above the acquisition price and renovation costs.

    Rate: 3.625% Fixed
    Term: 3 Years
    LTV: 65%
    Prepayment: None
    Guaranty: Full Recourse

  • 8 Day Close on an $11,000,000 Cash-Out Loan for a Spec Single Family Home; Southern California

    September 15, 2021

    Transaction Description:

    George Smith Partners successfully advised on $11,000,000 for cash-out financing for the completion of a high-end luxury home in Los Angeles, California. The loan retired a higher interest rate and was also closed before certificate of occupancy was issued. GSP was able to source a lender who understood the significant value of the home from day one, did not require an appraisal, was comfortable with the Sponsor’s ability to receive COO, did not require the Sponsor to holdback any interest in a reserve account and did not have a minimum interest due or require a prepayment penalty. The 12-month loan term was structured to provide the Sponsor with time and flexibility to obtain certificate of occupancy and sell the asset within the Sponsor’s timeline.

    Rate: 7.99%
    Term: 12 months
    Amortization: Interest Only
    Lender Fee: 1%
    Prepayment or Minimum Interest Requirement: None
    Legal/Loan Doc Fee: $425

  • $3,450,000 in Permanent Financing for an Industrial/Flex Center; Southern California

    September 8, 2021

    Transaction Description:

    George Smith Partners secured $3,450,000 for the refinance of an industrial/flex business park in Southern California. The Property is 66,600 square feet across 6 buildings with 31 tenants. GSP identified a lender that could lock the rate at 2.75% for more than 4 months to allow the prepayment penalty on the existing loan to burn-down. The Lender also agreed to increase the loan amount during due diligence to finance large near-term roof repairs. The loan has a 10-year term with five years of interest- only payments.

    Rate: 2.75% Fixed
    Term: 10 years
    Amortization: 5 Years Interest-Only, 25 Years Am Thereafter
    Guarantee: Non-Recourse
    Prepayment: Yield Maintenance Years 1-5, Stepdown Thereafter

  • $20,530,000 Non-Recourse Construction Financing for a 25-Unit Luxury Beachfront Condominium, For-Sale Development; Cocoa Beach, FL

    September 8, 2021

    Transaction Description:

    George Smith Partners successfully arranged $20,530,000 in non-recourse senior construction financing for The Surf, a beachfront condominium project in Cocoa Beach, FL. The Project consists of 25 luxury residential units with sale prices ranging from $975,000 to $2,500,000, as well as 3 ground floor retail units. The Project is currently 75% pre-sold. Per Florida statutes, any buyer deposit amount over 10% of the purchase price may be used towards development costs, but a large portion of those deposits are not due from buyers until building top off. GSP was able to successfully secure a lender comfortable with crediting future deposits to decrease the Sponsor’s up-front equity requirement.

    The Sponsor’s co-developer and GC tragically passed in early 2020, leading them to engage a new group. While the new GC had extensive experience in luxury housing development, they are relatively new to ground-up, multi-level condominium development. GSP leveraged its extensive lender network, strong pre-sales, and the Orlando-based Sponsor’s strong development track record in this submarket and product type to provide non-recourse construction financing.

    The term is 24 months with interest-only payments and 6 months minimum interest. The senior note was sized to 64% LTC. GSP structured the loan, crediting future sales deposits towards the total equity requirement, thereby eliminating any additional out-of-pocket equity required at closing above the land acquisition and predevelopment costs already spent to date.

    Rate: WSJ Prime +4.50%
    Term: 24 Months + Two 2-Month Extensions
    Amortization: Interest-Only
    Loan to Cost: 64%
    Prepayment: 6 Months Minimum Interest
    Guaranty: Non-Recourse
    Lender Fee: 1% In, 1% Out

  • $2,650,000 Non-Recourse Cash-Out Refinance to 95% of Total Capitalization; Long Beach, CA

    September 1, 2021

    Transaction Description:

    George Smith Partners placed the cash-out refinance of a recently renovated 10-unit Long Beach multifamily property. This asset was acquired less than 18 months prior to our Sponsor initiating a $1,000,000 ($100,000 per unit) reposition of the property. These upgrades allowed the complex to be re-leased at market rate rental terms. Our take-out capital, a local regional bank, acknowledged the tremendous value-add and sized to market rather than the Sponsors’ capitalization. Sized to 65% of “As Is” value and a 1.25 DCR, proceeds returned most of the cash equity invested. Our DCR was measured against the actual annualized rent roll at close although relied upon proforma operating expenses due to the recent reposition and lease-up. This permanent loan is fixed at 3.15% and is full-term interest only for the three years. A five-year term was also offered under the same rate although our Sponsor opted for a 1,1,1 prepayment schedule rather than the more expensive five-year option.

    Rate: 3.15% Fixed
    Term: Three Years
    Amortization: Interest Only
    LTV: 65%
    LTC: Not Applicable
    DCR: 1.25 based on proforma expenses
    Guaranty: Non-Recourse
    Prepayment: 1,1,1

  • $25,818,000 Bridge Loan Refinance of Vacant 51-Unit Multifamily Property; 85% LTV;5.2% Stabilized Debt Yield; Los Angeles, CA

    September 1, 2021

    Transaction Description:

    George Smith Partners secured $25,818,000 in proceeds for the cash-neutral bridge loan refinance of a 51-unit multifamily property in Los Angeles. The Lender provided proceeds of 85% of appraised value and underwrote to a 5.2% stabilized debt yield. The new loan refinances both the construction loan and the preferred equity that were part of the original financing. The loan is floating at LIBOR + 6.00% with a 6.65% floor.

    At the time of financing the Property was 95% complete but still short of a temporary certificate of occupancy. In addition, the leverage on the loan precluded several lending sources from achieving the necessary proceeds. The Sponsor desired to completely pay off the original construction financing, which was originated at 85% loan to cost. Only a few lenders could get the requested leverage and the market quoted pricing in the high single digits. Lastly, Koreatown experienced Covid related collection issues which affected the rental underwriting. GSP provided rental and sales comps that proved out the strength of the market. As a result, the selected Lender became comfortable with the location and the Sponsor’s ability to lease up the new Property.

    Rate: Floating at LIBOR+6.00% with floor of 6.65%
    Term: 12 months + one 12-month extension
    LTV: 85%
    Debt Yield: 5.2%
    Guaranty: Non-Recourse at Certificate of Occupancy

  • $4,000,000 Permanent Loan on Mixed Use, New Construction in a Secondary Market; Temecula, CA

    August 25, 2021

    Transaction Description:

    George Smith Partners successfully secured $4,000,000 in permanent financing for a mixed-use retail and office property in the heart of Old Town Temecula, California. The recently constructed 16,046 square foot property was recently leased to two restaurant tenants and one office tenant. Loan proceeds were used to retire existing, maturing construction debt and provide cash out for the Sponsor. The sub-4% fixed-rate loan is prepayable at any time without penalty.

    The Deal presented several challenges. While the ground floor restaurant had technically been in place for several months, it had limited operating history due to Covid 19 restrictions prohibiting indoor dining. The second-floor restaurant, a locally owned start up concept, opened their doors after loan closing and had no operating history.

    GSP was able to source a lender who understood the strength of the Downtown Temecula market and was able to get comfortable with the product type and lack of operating history.

    Rate: 3.75%
    Term: fixed for 5 years
    Prepayment: Open
    LTV: 53% Loan-to-Value
    Guaranty: Full Recourse

  • $23,000,000 Construction Financing for 117-Unit Multifamily Construction; Lansing, MI

    August 25, 2021

    Transaction Description:

    George Smith Partners successfully advised on $23,000,000 in senior debt construction financing for a 117-unit multifamily transaction in Lansing, MI. This is the second financing arranged by GSP for the Sponsor and follows on the successful $44,500,000 financing GSP advised on. GSP successfully navigated the markets to identify and close with a lender that was comfortable with PACE financing layered in the capital stack. This multifamily project will offer studios, one and two-bedroom units with modern furnishings.

    Terms Confidential

  • High Leverage Land Development Financing for Build By-Right Land, for 92-UnitMultifamily ,75% LTC; Koreatown area of Los Angeles, CA

    August 18, 2021

    Transaction Description:
    George Smith Partners arranged $3,500,000 in land pre-development financing for Phase II of a multifamily development project. The vacant lot will be developed into 92 workforce housing units located in the Koreatown area of Los Angeles, CA. The Sponsor is addressing the need for workforce housing in this area. GSP utilized a unique capital source to arrange highly favorable and flexible capital to allow the Sponsor’s long-term plan of developing workforce housing communities within Los Angeles. The loan represents 75% of the pre-development soft costs to bring the Project to permit-ready status. This is the second phase of the land development. The interest-only land loan was priced at 5.50%, with a 24-month term and one 6-month extension option. The extension option gives flexibility to the Sponsor should they be unable to pull permits within 24 months. There is additional flexibility with the loan structure with no prepayment penalty. Despite being on a strict closing deadline, GSP was able to identify a lender who could execute on terms and close within 30 days.

    Rate: 5.50%
    Term: 24 Months, One 6 Month Extension
    LTV: 75%
    Prepayment: None

  • $4,680,000 Paper Lot Land Acquisition Loan in Ten Days; San Diego, CA

    August 18, 2021

    Transaction Description:
    George Smith Partners successfully placed a $4,680,000, 50% LTV loan to fund the acquisition of a 6.9-acre parcel of land located in North County, San Diego, California, and the funds needed to finalize the entitlements for 135 paper lot townhome subdivision.

    When GSP became involved, the Borrower had already invested over $2,300,000 to secure a tentative map and development agreement while the land was under option. However, there were only ten days remaining on the purchase contract when the land lender with whom the Borrower had been dealing with directly, declined to proceed. When the Seller refused to grant the Buyer an extension on the purchase escrow, GSP was engaged to arrange the land acquisition financing to enable a timely closing.

    GSP had several highly reliable alternative land lenders that could close within ten days. Strategically, GSP selected a lender that was not only willing to finance the land acquisition and final entitlements, but also was willing to give the Sponsor a strong indication that they would favorably consider funding the future stages of the project, including the grading, horizontal land, and infrastructure development as well as the vertical construction financing once the final map was achieved in approximately nine months.

    Rate: 10%
    Term: 18 Months
    LTV: 50%
    Guaranty: Non-Recourse with Bad Boy Carveouts
    Fee: 3%