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Financings

Recent Financings

  • $5,300,000 Office Cash-Out Refinance; San Fernando Valley, CA

    June 9, 2021

    Transaction Description:

    Classified as an owner-user, this multi-tenant office building was being transitioned during due diligence as a new ground floor tenant leased a third of the net rentable but had not taken occupancy due to COVID restrictions. The delayed funding worked to our Sponsor’s benefit as it allowed GSP to restructure the loan for additional net proceeds while reducing the Sponsor’s current SBA pre-payment penalty. All additional proceeds were used to consolidate business lines and other unrecorded debt at a substantially lower interest rate. An early rate lock feature permitted the Sponsor to take advantage of lower indexes prior to the rate bump. This non-SBA execution is fixed for ten years at 3.00% and was sized to 75% LTV and a 1.25 DCR. The loan is open to prepayment without penalty after the 5th year.

    Rate: 3.0%
    Term: 10 Years
    Amortization: 25 Years
    LTV: 75%
    DCR: 1.25
    Prepayment: 5,4,3,2,1 open

  • $7,850,000 Acquisition Loan for 48 Unit Multifamily Property; Fixed at 3.30% for 7 Years; Hollywood, CA

    June 9, 2021

    Transaction Description:

    George Smith Partners successfully secured $7,850,000 in proceeds for the acquisition of a 48-unit multifamily property in Hollywood. The loan is fixed at a rate of 3.30% for 7 years and has 5 years of interest only payments. The Property’s location, a few feet from a fault line, raised a concern that earthquake insurance might be required. GSP conducted a comprehensive search of city records and engaged a seismic report to demonstrate that sufficient retrofit work had already been completed. As a result, the Lender waived the additional insurance. Several lenders required a reserve account of 6-12 months of P&I payments, but the selected lender had no holdbacks or reserves. The loan closed with no changes to the original application.

    Rate: Fixed for 7 years at 3.30% with initial 5-years IO
    Term: 7 years
    Amortization: 30 years
    Prepay: 3,3,2,2,1
    LTV: 65% max
    DCR: 1.20x
    Lender Fee: $0

  • Non-Recourse Bridge Acquisition Financing for Industrial Building; Wilmington, CA

    June 2, 2021

    Transaction Description:

    George Smith Partners successfully arranged bridge acquisition financing for a single-tenant industrial building in Wilmington, CA. The Property is 3,950 SF on an approximate 8,640 SF parcel. The previous owner occupied the Property, and the building is now vacant. GSP secured a 12-month, non-recourse bridge loan at 7.90% fixed with interest only payments and no prepayment penalty. This will provide the Sponsor time to lease the Property and season it for permanent financing. The financing closed within two weeks of term sheet issuance.

    Rate: 7.90% Fixed
    Term: 12 Months, with Extension Options
    Amortization: Interest Only
    LTP: 57%
    Prepayment: None
    Guaranty: None

  • $12,130,000 Construction Financing for 49 Townhomes for Rent; Phoenix, AZ

    June 2, 2021

    Transaction Description:

    George Smith Partners successfully placed a $12,130,000 ($247k/unit) construction loan to construct 49 townhomes for rent. The loan is floating rate at Prime plus 125 bps. with a floor at 5% and has a 2-year term with a 2-year mini perm extension. The Property will cater to higher income renters in the affluent Arcadia area of Phoenix, AZ. GSP leveraged its extensive expertise in the single-family rental sector to source options for the Sponsor who is a top tier private equity firm that has entered the build to rent space with several transactions.

    The Project targeted a higher end renter (“renter by choice”) that wanted to live in an excellent neighborhood. Many other build to rent projects are targeted to a more affordable and “renter by necessity”. This higher end strategy was a bit more difficult to market, but the Project had strong sponsorship and the Lender had familiarity with the desirability of the specific neighborhood.

    Rate: Prime plus 125 bps. 5% floor.
    Term: 2 years plus 2-year mini perm
    LTC: 60%
    Amortization: Non
    Guaranty: Non-Recourse except for standard carve outs, “bad acts”, and environmental

  • $1,200,000 Permanent Refinance on Multi-Tenant Industrial Building for Sponsor with Discharged Bankruptcy; Sun Valley, CA

    May 26, 2021

    Transaction Description:

    George Smith Partners successfully arranged a $1,200,000 permanent refinance for a fully occupied, eight-unit industrial building in the Sun Valley neighborhood of northern Los Angeles, CA. The Sponsor acquired the fully entitled site in 2015 and completed construction in 2016. The Property consists of two buildings totaling 8,084 SF on a 20,452 SF parcel.

    The Sponsor had a Chapter 13 bankruptcy due to the impacts of the Great Recession. Having worked diligently to pay off creditors, the bankruptcy was ultimately discharged in 2017. At the same time, the Sponsor’s real estate portfolio grew substantially despite very limited access to capital sources. GSP was engaged in hopes of capitalizing on the low interest rate environment despite the bankruptcy being on record.

    GSP focused on the Sponsor’s strong track record and leveraged its longstanding relationship with a lender who provided a 4.90% fixed rate for 5 years, with a 5-year extension option. The loan is interest only the first year and then fully amortizing for the remaining 24 years.

    Rate: 4.90% Fixed; Resets after Year 5
    Term: 5 Years + Extension Option for 5 Years
    Amortization: 1 Year Interest Only; 25 Years thereafter
    LTV: 58%
    Guaranty: Recourse

  • $14,750,000 Cash-Out Construction Loan for an 80% completed Single Family Residence; Los Angeles, CA

    May 26, 2021

    Transaction Description:

    George Smith Partners successfully placed $14,750,000 in a cash-out construction loan for the completion of a high-end luxury home in Los Angeles, California. The loan retired a higher interest rate, funded an interest reserve account, and provided additional proceeds to fund the remaining budget of the development. The nineteen-month loan term was structured to provide the Sponsor with time to finish construction, obtain certificate of occupancy and sell the asset. Many lenders were on the fence about lending to the high-end luxury market or did not want to take on the risk of financing a mid-construction project. GSP leveraged its expertise of the Los Angeles market along with its local lender relationships to achieve all the Sponsor’s goals.

    Rate: 6%
    Term: 19 months + two six-month extension options
    Amortization: Interest Only
    LTC: 50%
    Guaranty: Full recourse
    Banking Relationship/Deposits: None

  • $5,220,000 Refinance for Retail Center; Fixed at 3.50%; Bank Financing Closed During Covid-19 Pandemic; Los Angeles, CA

    May 19, 2021

    Transaction Description:

    George Smith Partners secured a $5,220,000 refinance loan for a five-tenant retail center located on a major commercial avenue in Los Angeles. The loan is fixed at a rate of 3.50% for 5 years and does not require any holdbacks. The transaction went into application and was closed during the COVID-19 pandemic.

    Retail property values have been under scrutiny over the past year and declined in some markets. To substantiate property value, GSP emphasized the Property’s infill location and credit tenants. All 5 of the tenants were considered essential businesses and remained open. The Borrower provided three months of collections data to show that the tenants were consistently paying rent. During the site inspection, significant foot traffic was observed. These factors helped support the appraised value and maintain the proceeds in the loan application.

    Rate: 3.50% fixed
    Term: 5 yrs
    Reserve: None
    Amortization: 30 years
    Prepayment Penalty: 3,2,1,1,1
    LTV: 65%
    DCR: 1.25x

  • $8,400,000 Non-Recourse Acquisition/Bridge Loan for a 50% Occupied Apartment Building; Hayward, CA

    May 19, 2021

    Transaction Description:

    George Smith Partners identified a national balance sheet lender with an intimate knowledge of the Hayward submarket and arranged $8,400,000 in acquisition and bridge financing for the purchase and reposition of a currently 50% occupied, 1960’s-built apartment complex located in Hayward, CA. The Sponsor placed the portfolio under contract during the COVID-19 pandemic.

    The loan includes $1,350,000 of future funding for extensive renovations of unit interiors and exterior upgrades, including an earthquake retrofit. Interest is not charged on the holdback until funds are drawn. This Capital Provider also structured and capitalized an interest reserve to cover the shortfall of cash flow during repositions. Sized to 76% of the total capitalization, the three-year bridge loan is interest only for 36 months and carries a floating rate of LIBOR + 4.25% and include two extension options for up to a term of five-years.

    Rate: LIBOR + 4.25%
    Term: 3 Years, with two 1-year extensions
    Amortization: Interest Only
    Loan-to-Cost: 76%
    Repayment: Carve-Outs Only
    Prepayment: 18 months
    Loan Fee: 1.0% in / 0.25% exit

  • High Leverage Acquisition Land Financing of $5,880,000 for Build By-Right Land, to-be 82 Multifamily Units, 75% LTV; Koreatown area of Los Angeles, CA

    May 12, 2021

    Transaction Description:

    George Smith Partners arranged $5,880,000 in acquisition land financing for a 18,000 SF vacant lot to be developed into 82 workforce housing units located in the Koreatown area of Los Angeles, CA. The Sponsor is addressing the need for workforce housing in this area of Los Angeles. There is a gap between high housing prices/rent and employee household incomes. This is creating a shortage of affordable housing. The loan represents 75% of the purchase price and is structured with a holdback feature to cover the predevelopment soft costs to bring the Project to permit-ready status. The interest-only land loan was priced at 5.50%, with an 18-month term and one 6-month extension option. The extension option gives flexibility to the Sponsor should they be unable to pull permits within 18 months. There’s additional flexibility with the loan structure because there is no prepayment penalty. Amid market uncertainty, GSP was able to leverage their network to identify land lenders who could provide certainty of execution. Despite being on a strict closing deadline, GSP was able to identify a lender who could close within the required deadline.

    Rate: 5.50%
    Term: 18 Months, One 6 Month Extension
    LTV: 75%
    Prepayment: None

  • $11,825,000 Cash-Out, Non-Recourse, Permanent Financing with a 3.35% Coupon for a 20-Year Term on an Office Property; Fayetteville, Arkansas

    May 12, 2021

    Transaction Description:

    George Smith Partners successfully placed $11,825,000 ($200/SF) in non-recourse financing that provided substantial cash-out to the Borrower with a 3.35% fixed-rate coupon for a 20-year loan term on a University-affiliated research and technology office building during the COVID-19 pandemic. The loan was creatively structured as a credit tenant lease financing due to the University’s backstopping the Property’s cash flow through a master lease. GSP worked with the Borrower, Lender, and University to amend the master lease so that it satisfied the needs of all three parties to facilitate both the refinancing as well as successful donation of the building to the University’s technology foundation, which occurred concurrently with the close of this financing.

    Rate: 3.35% (fixed) for twenty years
    Term: 20 years
    Amortization: 20-year amortization
    LTV: 68%
    DSCR: 1.05x
    Lender Fee: Par
    Prepayment: Yield Maintenance
    Guaranty: Non-Recourse

  • 79.5% LTV Acquisition Loan for 6-Unit Multifamily Property; Koreatown area of Los Angeles, CA

    May 5, 2021

    Transaction Description:

    George Smith Partners structured $1,590,000 of acquisition bridge financing for a 6-unit multifamily building in a well-located area of the Koreatown section of Los Angeles. The existing building is almost 100 years old and underutilizes the potential density that the site allows for. The Sponsor plans to entitle the site for a larger multifamily development down the line. A 12-month term will give them ample time to prepare to be shovel ready. GSP was able to secure a high leverage execution between a senior lender and a mezzanine lender that provided 79.5% LTV based on purchase price. The blended rate of the total debt stack is 8.84% and is interest only. While the senior loan is non-recourse, the mezzanine lender does require recourse on their portion.

    Blended Rate: 8.84%
    Term: 12 Months
    Loan-to-Purchase: 79.5%
    Prepayment Penalty: None
    Guaranty: Non-Recourse to Senior Lender, Recourse to Mezzanine Lender

  • $14,250,000 ($229,839/unit) Cash-Out Permanent Financing for a 62-unit, Two-Property Multifamily Portfolio; Los Angeles, CA

    May 5, 2021

    Transaction Description:

    George Smith Partners successfully placed $14,250,000 ($229,839/unit) in a cash-out, uncrossed (two loans) refinance of two multifamily properties totaling 62 units in Los Angeles, during the COVID-19 pandemic. The loan is fixed at rate of 3.350% for the first 7 years, then converts to a floating rate. Despite the economic uncertainty during the transaction, GSP leveraged the firm’s collective production and relationship with the Lender to close the loans with loan terms as originally structured. GSP worked the lender to diligently ensure a quick closing and to maximize proceeds while addressing COVID related concerns. Both properties had undergone extensive renovations and upgrades since the acquisition in 2018 and have maintained over 95% occupancy throughout 2020 despite the pandemic.

    Rate: 3.350% fixed for 7 years, converts to floating for remaining loan term
    Term: 30 Years
    LTV: 67%
    Amortization: 5 Years Interest Only followed by 30 Year Amortization
    Guaranty: Non-Recourse except for standard carve outs, “bad acts”, and environmental