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Financings

Recent Financings

  • $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%

  • $16,100,000 Cash-Out Permanent Financing for a Theater Anchored Shopping Center; Dardenne Prairie, MO

    November 29, 2021

    Transaction Description:

    George Smith Partners arranged the cash-out permanent refinance of a 153,726 SF grocery-anchored retail community center in Dardenne Prairie, MO, about 30 miles west of St. Louis. The Subject Property is anchored by Schnucks and Marcus Theater and is also shadow anchored by Target, which is under separate ownership. The loan is sized to 62% LTV, fixed for 5 years with 20 years amortization.

    The Sponsor approached GSP to arrange a non-CMBS loan resulting in $4,000,000 cash-out. The proceeds were used to buy-out his partners and lower the debt service from their previous loan. The theater component, along with a decreased appetite for retail lending due to market conditions made it difficult for capital providers to get comfortable with the asset type and cash-out. GSP identified a lender who was willing to provide a higher loan to value and competitive terms that maximize the Sponsor’s cash-out.

    Rate: 3.95%
    Term: 5 year fixed rate
    Amortization: 20 Years
    Loan to Value: 62%
    Prepayment: 2,1,0
    Guaranty: Full Recourse

  • 3.15% Fixed Rate, Interest-Only Cash-Out Refinance for Owner-User Office Building; Beverly Hills, CA

    November 23, 2021

    Transaction Description:

    George Smith Partners arranged $6,650,000 in owner-user financing for a multi-tenant, 50% owner-user office property located in Beverly Hills, CA. The Sponsor approached GSP to help assist with taking equity out of the Property to reinvest in their company. The Sponsor requested a low interest rate and $2,500,000 cash out. The multi-tenant component, along with a decreased appetite for office lending due to “Work-from-Home”, made it difficult for capital sources to get comfortable with the cash-out and interest-only request. GSP had to identify a capital source that could provide competitive terms, and a certainty of execution. Being in the market daily, GSP was able to successfully structure a first trust deed from a conventional lender and provided the Sponsor with a below-market interest rate of 3.15% fixed, and interest-only payments for the first 5 years of the 10-year term. Thanks to the low-rate and interest-only component, the Sponsor was able lower their debt service from their previous loan, while simultaneously securing over $2.,500,000 in cash-out.

    Rate: 3.15% Fixed
    Loan Amount: $6,650,000
    Term: 10 Years
    Prepayment: 5-4-3-2-1

  • $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

  • $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

  • $16,380,000 of Permanent Financing for Revitalized Downtown Office Building; Los Angeles, CA

    November 17, 2021

    Transaction Description:

    George Smith Partners arranged $16,380,000 in permanent financing for a newly stabilized, 7-story office building in the historic core of Downtown Los Angeles. The Sponsor purchased the Property in 2017 and completed a massive renovation to completely modernize the structure, façade, and interiors. The Sponsor leased 85% of the building prior to completing the renovation, including the ground-floor retail suite which is leased to a very high-end restaurant group. Some of the tenants are marijuana-related-businesses (“MRB’s”), meaning they service companies associated with marijuana, which made the financing challenging. GSP identified a recourse bank that was comfortable with the tenants and structured a five-year loan with an earn-out for additional leasing. The financing is fixed at an interest rate of 3.75% for the entirety of the loan term and will amortize over a 30-year period.

    Rate: 3.75% (Priced 0.50% over Prime)
    Term: 5 Years
    Amortization: 30 Year Amortization
    Loan to Value: 65%
    Guarantee: Recourse
    Lender Fee: 0.50%
    Prepayment: Stepdown

  • $3,400,000 Flex Office Refinance with100% Roll; Santa Barbara, CA

    November 10, 2021

    Transaction Description:

    George Smith Partners placed the refinance of a two-tenant flex-office building in the central business district of Santa Barbara. Currently 100% leased and occupied, there is a 100% roll within the next 20 months. Our Sponsor reduced his current coupon by over 50 bpts and locked in today’s historically low interest rates for five years rather than facing interest rate risk in two years when his current loan would have matured. Our Sponsor also benefited from a nominal return of equity. Despite the tenant roll, there are no holdbacks, reserves, escrows, or impounds. The interest rate was locked at application without the requirement of a deposit. Sized to 65% of appraised value, the ten-year term is fixed for five years before a fixed rate reset for the remaining five-year term. Amortized over 30 years, prepayment steps down from 3% and is open the remaining two years of each five-year term. All prepayment penalties are waived in the event of a sale.

    Rate: 3.50% Fixed for Five Years
    Term: Ten Years – 5+5
    Amortization: 30 Years
    Loan to Value: 65%
    Reserves/Holdbacks: None
    Lender Fee: Par

  • $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

  • $3,500,000 10-Year Full Term Interest-Only Permanent Financing, 40,000 SF Industrial Business Park; Murrieta, CA

    November 3, 2021

    Transaction Description:

    George Smith Partners secured $3,500,000 in non-recourse debt to refinance a Southern California industrial business park. The Property is a 40,000 square foot, 100% occupied, industrial/flex building, majority occupied by automotive tenants. The financing takes out the existing debt, distributes capital for a significant roof repair, and redistributes equity to the Sponsor. The loan was underwritten to 60% LTV. The 10-year full term interest structure maximizes cash flow for the Sponsor. The fixed-rate loan priced at 1.80% over the 10-year SWAP.

    Rate: 3.42% (1.80% over the 10 Year SWAP)
    Term: 10 Years
    Amortization: Full-term Interest-Only
    Loan to Value: 60%
    Guaranty: Non-recourse
    Lender Fee: Par
    Prepayment: Defeasance

  • $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

  • $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

  • $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