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Financings

Recent Financings

  • $8,750,000 Bridge Refinance with Cash-Out for 35-Unit Multifamily Property; San Jose, CA

    January 13, 2021

    Transaction Description:

    George Smith Partners secured $8,750,000 in total financing comprised of a 60% LTV first mortgage and a 10% LTV second mortgage for a 35-unit multifamily property in San Jose, CA. The loans provided significant cash-out proceeds at a blended rate of 7.41%. Both loans have a 12-month term, interest-only payments and are open to prepayment without penalty. Recourse is limited to 50% of the second mortgage only. The Property has maintained full occupancy and rent collections despite the COVID-related impacts in the overall market. The Lender did not require reserves for potential COVID rental interruption. The Sponsor developed the Property in the 1980s and engaged GSP to provide a high leverage, quick-close financing solution. The financings closed within 8-days of the Lender’s issuance of term sheets.

    Blended Rate: 7.41% Fixed
    Lender Fee: 1%
    Term: 12 Months, Interest Only
    LTV: 70%
    Prepayment: None
    Guaranty: None on First Mortgage; 50% on Second Mortgage

  • $13,777,000 Portfolio Refinance for 5 Multifamily Properties, Non-Recourse, Cash-Out, Interest Only, No Payment Reserves; Los Angeles, CA

    January 13, 2021

    Transaction Description:

    George Smith Partners placed 5 non-crossed loans totaling $13,770,000 to complete the refinance of a 67-unit multifamily portfolio in Los Angeles. The financing represents a significant return of equity to the Sponsorship while simultaneously lowering their previous interest rate. The loans all carry a fixed interest rate of 3.35%, a 5-Year term, and include interest only payments ranging between three and five years. In contrast to many lenders that are currently structuring six to twelve months of P&I reserves, GSP successfully negotiated waiving any shortfall structure.

    Given the current market challenges (stemming primarily from COVID) even multifamily properties are experiencing additional scrutiny from both underwriters and appraisers. Despite these new hurdles, GSP was successful in maintaining the loan proceeds originally represented in the application. Through a combination of presenting real-time comparable market data to the appraiser and working with the Lender to increase the initial LTV stipulation, GSP overcame the valuation issues that arose as a result of the final appraisal. After presenting market data on a number of similar stabilized asset transactions we demonstrated that LA multifamily properties with consistent occupancy and collections have exhibited minimal value declines, ultimately convincing the Lender to increase the LTV constraint from 60% up to 65% and preserving the full cash-out proceed amounts.

    Rate: 3.35% Fixed
    Term: 5 Years
    Amortization: 5 Years Interest Only
    LTV: 65%
    DSCR: 1.25x
    Prepayment: 3,2,1
    Loan Fee: Par
    Guaranty: Non-Recourse

  • $4,400,000 Permanent Refinance of Two Flex Buildings, Jacksonville, FL

    January 6, 2021

    Transaction Description:

    George Smith Partners successfully arranged a $4,400,000 refinance of two flex buildings, totaling 68,169 SF, in Jacksonville, FL. This was a permanent, recourse loan at 3.75%, fixed for the first 10 years with a rate reset at every 10 years thereafter. This is a fully amortizing 25-year loan. The two buildings are adjacent to each other and offer a mix of flex, office and retail space. Both buildings are currently 100% occupied with minimal impact of COVID-19 on its tenants. The Sponsor, a repeat client, acquired the Property just a month prior and engaged GSP to capitalize on the low interest rate environment.

    Rate: 3.75% Fixed; Adjusts every 10th year
    Term: 25 Years
    Amortization: 25 Years
    LTV: 66%
    Guaranty: Recourse

  • Bozeman, MT Land Development Loan for 400 Unit Project

    January 6, 2021

    Transaction Description: George Smith Partners secured an $8,150,000 pre-entitlement land development loan for a proposed 400-unit project in Montana. The 65% loan to cost financing is priced at 5.00% over LIBOR (with a 50-bps floor) interest only. The loan will allow the Sponsorship to build out the necessary infrastructure to obtain the plat map and secure full entitlements in 2021. The Project will be one of the largest in the state of Montana and this crucial financing is essential to meet the growing housing shortage in these markets which have accelerated during the COVID-19 pandemic.

    Challenge: The large, pre-entitlement project is situated on the outskirts of a tertiary market that was officially classified as a Micropolitan Statistical Area (according to the 2010 Census). Moreover, despite the Institutional Sponsorship, the small market is not a target focus for many regional or national lending institutions traditionally capable of handling loans of this nature. The size of the loan also precluded many local/state banks from obtaining the necessary leverage for the Project.

    Solution: GSP secured a regional bank with headquarters near the Project which could understand the growth metrics of the projected Metropolitan Statistical Area (based on the 2020 Census) and how the Project will be vital to the long-term development of the City. The bank relied on the financial strength of the Sponsorship to advance 65% LTC and become comfortable with the pre-entitlement status of the Project. The loan which closed in 45 days from application also included a necessary bank provided, letter of credit to the City which guarantees the necessary capital to be invested into the Project to obtain entitlements.

    Rate: 5.5%
    LTV: 60%
    LTC: 65%
    Term: 12 months
    Recourse: Full Recourse

  • $1,750,000 Refinance for 296-Unit Unique Self-Storage Facility; Georgetown, TX

    December 16, 2020

    Transaction Description:
    George Smith Partners successfully arranged a $1,750,000 refinance for a unique 296-unit self-storage facility consisting of 46,608 square feet in Georgetown, TX. This was a permanent recourse loan at 3.30%, fixed for the first 3 years with a rate reset every 3 years thereafter. The loan is fully amortizing over 20 years. The Property consists of large cargo shipping containers that have been welded together and are not permanently affixed to the ground. The units are both climate and non-climate controlled and are currently 94% occupied. The Property is also a leading provider for U-Haul rentals in this infill area of downtown Georgetown. The Sponsor, a repeat client, acquired the Property all cash in March 2020 and engaged GSP for a permanent financing solution.

    Challenges:
    The uniqueness of the improvements was challenging for lenders to get comfortable with and many declined the request. The interested lenders proposed to finance the improvements from an equipment loan standpoint versus real estate. This option was unappealing to the Borrower because an equipment loan would have limited the amortization to 12-years, thus leaving no cash flow.

    Solutions:
    GSP leveraged its expertise and strong relationship with a Life Insurance Company lender to execute a low fixed-rate, 20-year fully amortized permanent loan. GSP was able to get the Lender comfortable given the conservative 45% loan to value request, historical occupancy, cash flow and appraised value.

    Rate: 3.30% Fixed; Adjusts every 3rd year
    Term: 20 Years
    Amortization: 20 Years
    LTV: 45%
    Guaranty: Recourse

  • $7,600,000 Permanent Financing on a 120,000 sf Shopping Center; Northern California

    December 16, 2020

    Transaction Description:

    George Smith Partners successfully arranged $7,600,000 in permanent financing for a non-traditional anchored shopping center in Northern California. The Big Lots and Dollar Tree anchors had short terms remaining on their primary leases and they both had exceptional health ratios (occupancy cost/total sales). The other two non-credit anchors are doing well. During the Covid-19 pandemic, our Sponsor lost a restaurant tenant and provided rent relief for some of the other tenants. Today, all the tenants are currently paying their rents in full.

    Rate: 3.73% Fixed
    Term: 10 years
    Guaranty: Non-recourse except for Bad Act or Environmental
    Lender Fee: Par

  • $12,500,000 Non-Recourse Acquisition Financing for Unentitled Land; Van Nuys, CA

    December 16, 2020

    Transaction Description:

    George Smith Partners arranged $12,500,000 in non-recourse financing for the acquisition of land which the Sponsor will entitle for 333 apartment units. GSP was able to locate a lender able to provide 85% of the purchase price. Not only was the loan high-leverage, it had no holdbacks for pre-development costs, making servicing very simple for the Borrower. The Sponsor intends to complete the entitlements and refinance into a construction loan in 6-12 months.

    Rate: 9.75%
    Term: 12 Months
    Amortization: Full Term Interest Only
    LTV: 85%
    LTC: 65% of predevelopment expenses
    Prepayment: 6-months
    Guaranty: Non-Recourse

  • $2,260,000 Cash Out Refinance for a CVS to a 1.15 DCR; Dallas, TX

    December 9, 2020

    Transaction Description:

    George Smith Partners placed the non-recourse cash-out refinance of a stand-alone CVS in a Dallas suburb. Our Capital Provider underwrote to a 1.15 DCR without any deductions (vacancy, capex) for the net-leased asset to an investment grade tenant. There were no impounds or tenant improvement reserves taken as the tenant pays all expenses directly on their 20-year lease. Amortized over 25 years, the seven-year term was locked at 3.75% without the requirement of a repayment guaranty.

    Rate: 3.75% for 7 Years
    Amortization: 25 Years
    DCR: 1.15 on Gross Income
    LTV: 70%
    Guaranty: Non-Recourse
    Prepayment: Locked for three years then 4-3-2-1

  • $8,000,000 Bridge Financing for Vacant Creative Office; Culver City

    December 9, 2020

    Transaction Description:

    George Smith Partners arranged $8,000,000 in non-recourse financing for the refinance of a vacant office building in Culver City which had just completed an extensive renovation into creative office. The Sponsor purchased the two-story building over 15 years ago as an owner-user. He invested significant capital to improve the building and create a modern creative office property that would appeal to creative office users in the technology and media industries attracted to Culver City. Prior to the pandemic, the Sponsor was negotiating with multiple tenants to occupy the building. These potential tenants paused on negotiations and the Sponsor had to quickly refinance his construction loan with a new bridge loan to allow him more time to lease-up.

    GSP accomplished the Sponsor’s goal to refinance the existing loan with a facility that is pre-payable at any time. This facility allows the Sponsor to lease up the remaining vacant space and refinance with a long-term loan in the next 6-12 months and it also provides additional funds for tenant improvements. GSP was able to identify a local lending source that not only understood the market and demand for office space in Culver City but also understood the overall value of the Property.

    Rate: 5.90% fixed
    Term: 12 months
    Amortization: Interest Only
    Prepayment: Open
    Guaranty: Non-Recourse

  • 70% LTC Construction Loan for 11-Unit Apartment Building; Los Angeles, CA

    December 2, 2020

    Transaction Description:

    George Smith Partners arranged $2,580,000 in construction financing for a ground up development project in Los Angeles, California. The construction loan floats at a rate of Prime + 1%. The 70% loan-to-cost construction loan also comes with the option to convert to a 5-year mini-perm loan upon completion based on the 5-year treasury plus a margin of 2.25%, with a 3.50% floor, eliminating any future financial risks. GSP sourced a lender during the COVID-19 pandemic that was able to move efficiently and most importantly accommodate the Borrower’s development timeline and experience.

    Rate: Prime +1%, with a floor of 5%
    Construction Term: 18 months + 6-month option to extend
    Mini-perm Option: 5-year treasury + 2.25% with a 3.50% floor
    LTC: 70%
    LTV: 58%

  • $14,050,000 Acquisition and Reposition Financing, 89% LTC (4.90% blended coupon) on a 79-Unit, Mixed-Use Apartment and Retail Project; St. Louis City, Missouri

    December 2, 2020

    Transaction Description:

    George Smith Partners successfully placed $14,050,000 in construction financing, which funded 89% of total project cost, for the acquisition and reposition of a 79-unit, mixed-use property in a desirable and historic St. Louis City neighborhood. GSP was engaged by the Borrower when its original lender, a national REIT, was forced to re-trade the Borrower on loan terms due to the COVID-19 pandemic. Upon being engaged, GSP was able to source the replacement debt and equity in time to close the transaction without a material delay. The financing structure included a senior loan to 81% loan-to-cost and a preferred equity investment with last-dollar exposure to 89% of total project cost with a 4.90% blended cost of capital. GSP leveraged its expertise of the St. Louis market, long-standing lender relationships, and capital markets creativity to achieve the Borrower’s goals of minimizing cash equity invested into the Project so that it can keep a substantial cash reserve to pursue additional projects which are expected to present themselves during the COVID-19 pandemic.

    Rate: 4.90%
    Term: 36-months with one, 12-month extension option
    Amortization: 24-months interest only, 25-year amortization thereafter
    LTC: 89%
    Prepayment: None
    Guaranty: Full repayment guarantee (on senior loan only; does not apply to the non-recourse preferred equity investment)
    Lender Fee: 50bps

  • Cash-Out Bridge Loan for Medical Office Building, Laguna Niguel, CA

    November 25, 2020

    Transaction Description:

    George Smith Partners secured a senior bridge loan for a 21,303 square foot office building in Laguna Niguel, CA. The Subject Property was unencumbered; hence the entire loan was comprised of cash-out proceeds which the Borrower is utilizing for a separate project they are developing. The loan represents approximately 60% of the original purchase price and was structured with a 1-year initial term with interest only payments. The loan allows for open prepayment and carries two 6-month extension options.

    The loan was collateralized by a recently renovated 21,303 square foot office building. The building had recently upgraded the facade, landscaping, parking lot, entrance, lobby, bathrooms, HVAC and other interior finishes. A new roof and solar system had also been installed. The building was 47% occupied at loan funding. The first-floor single tenant had vacated at lease expiration several months prior leaving limited debt service coverage and unusually high vacancy compounded by other COVID related issues.

    GSP selected a lender that was able to move incredibly quick to accommodate the Borrower’s development timeline. The Lender’s credit department approved the loan one-week post submission and did not require an appraisal to close. The Lender underwrote to the stabilized asset value, closed with no debt service reserve and no personal recourse.

    Rate: 5.90%
    Term: 12 months
    Amortization: Interest Only
    Loan Fee: 1.0%
    Prepayment: Open
    Options: Two 6-Month Extensions; 0.50% Fee
    Personal Guaranty: None