Featured Financings
Recent Financings
-
$9,300,000 Non-Recourse Cash Out Refinance For Los Angeles Multifamily Property
July 17, 2019
Transaction Description:
George Smith Partners secured a $9,300,000 Non-Recourse refinance loan for a 35 unit multifamily property in Los Angeles. The loan provides 65% leverage and is fixed at a rate of 4.04% for seven years. Over the past 3 years, the Sponsors renovated 27 of the 35 units with a heavy lift that neared $50K per unit. GSP sourced a lender that gave the Borrowers maximum credit for the higher income that resulted from leasing the newly renovated units. The Lender did not require seasoning on the new leases. In order to maximize underwritten cash flow, GSP provided data that demonstrated the very low vacancy percentage in the submarket. This allowed the Lender to use a slightly lower vacancy factor than that of a typical apartment transaction. Additionally, the Lender used market rate expenses despite some variation in the historical P&Ls. The Lender was able to rate lock at application and close in about 55 days.
Rate: Fixed at 4.04% for 7 years then floats at 6 Month LIBOR + 2.25%
Term: 30 years
Amortization: 30 years
Prepay: 4,3,2,1,0
LTV: 65%
DCR: 1.15
Guaranty: Non-Recourse -
$41,000,000 in Permanent Financing for 187,000 SF, Shopping Center in Lakewood, CA
July 17, 2019
Transaction Description:
George Smith Partners secured $41,000,000 in non-recourse debt to refinance an existing senior and mezzanine loan for a regional Southern California shopping center. The Property is 187,000 square foot center; 100% occupied, with anchor tenants Hobby Lobby and Michaels. GSP worked with the lender to assuage B-Piece buyer concerns of the anchor tenant’s termination risk. Loan proceeds repaid the existing senior and mezzanine loans, covered closing costs, and provided a return of equity to the Sponsor. The financing is a 10 year full term interest only loan that maximizes cash flow for the Sponsor. The non-recourse fixed-rate loan priced at 1.57% over the 10-year Treasury that had a floor of 2.40% at application.
Rate: 3.97% Fixed for Entire Term
Term: 10 Years
Amortization: Full-Term Interest Only
Loan-to-Value: 65%
Guarantee: Non-Recourse
Lender Fee: Par
Prepayment: Defeasance -
$3,400,000 Covered Loan for New Hotel Development 80% LTC; Los Angeles, CA
July 10, 2019
George Smith Partners secured financing for a non-recourse $3,400,000 covered land loan for a hotel development in Los Angeles. There is currently an existing building on the Property which allowed GSP to structure a highly leveraged land loan. Usually land loans are limited to 50% of the purchase price, but GSP’s strong relationships and experience allowed for the value of the current improvements to achieve much higher leverage.
Rate: 8.3%
Term: 1 Year
Amortization: Interest only
LTV: 80% of Purchase Price
Prepayment: None
Guaranty: Non-Recourse
Lender Fee: 1%- Advisors: Bryan Shaffer Max Lehrman Ruben Bohbot
-
$10,200,000 Refinance of a Multi-Tenant 100% Occupied Office Building; San Diego, CA
July 10, 2019
Transaction Description:
George Smith Partners successfully arranged a $10,200,000 refinance of a 69,552 square foot, multi-tenant office building in San Diego. The permanent recourse financing is fixed at 3.68% for the first five years with a rate reset for the remaining five years. The loan amortizes for 25 years with a declining step down prepay penalty.Challenges:
There is rollover risk of approximately 53% of the square footage from the largest tenant, with their lease expiring in three years. Because of this, other lenders proposed limited loan terms of five years or less or simply declined the financing request. Lender’s willing to finance required reserves to mitigate the rollover risk which was unappealing to our Sponsor.Solutions:
George Smith Partners worked with a new banking relationship who was able to get comfortable with the rollover risk given the conservative 56% loan to value request. The strength of the Sponsor and longevity of ownership helped the Lender meet the Sponsor’s financing requests.Rate: 3.68%
Term: 10 Years
LTV: 56%
Guaranty: Recourse -
$3,900,000 Cash-Out Permanent Financing with Full Term Interest-Only After Exchange; Los Angeles, CA
July 2, 2019
Transaction Description:
George Smith Partners financed the purchase of a mixed-use retail/office building in Los Angeles, California, last year, using a 1031 exchange. GSP used our vast experience with tax differed exchanges to arrange a cash-out financing with a seven-year fixed rate and is full term interest-only. The cash- out was used to purchase a new property and the Sponsor was able to reinvest their entire exchange in the purchase to differ any taxable gain. The new refinance allowed the Sponsor to pull cash out from the property tax free and use that cash to grow his real estate portfolio. While the cap rate at purchase was very low, the Property’s value will continue to increase due to its location in a great Los Angeles neighborhood. In a traditional loan, the Borrower would be limited on the loan size and cash flow but structuring the full term interest-only loan allowed the Sponsor to achieve positive cashflow and acquire the new asset without issue.
Rate: 4.9%
Term: Fixed for 7 Years
Amortization: Full Term Interest only
LTV: 70%
Prepayment: 4,3,2,1
Guaranty: Non-Recourse
Lender Fee: None- Advisors: Bryan Shaffer Max Lehrman Ruben Bohbot
-
$2,180,000 Spec Single Family Residence Construction Loan to 75% of Cost; Los Angeles, CA
June 26, 2019
Transaction Description:
George Smith Partners placed $2,180,000 in construction financing for a spec single family property in the upscale Cheviot Hills submarket of Los Angeles. The Sponsor’s business plan was to expand and redevelop the existing property into a 5,900 square foot spec luxury single family property. The challenges on this transaction included the need for maximum proceeds (75% loan to cost) and a sponsor embarking on its first ground up development project. Most lenders struggled given these challenges. However, after an extensive marketing effort, George Smith Partners sourced a lender that was comfortable with the leverage request. Given the Sponsor’s limited track record, a completion guarantee from the Sponsor’s general contractor was required, which GSP successfully negotiated. Sized to an aggressive 75% of total cost, the interest only loan is freely prepayable and will float at 0.75% over the WSJ Prime for 18 months.
Rate: Prime + 0.75%
Term: 18 Months with one 6 month extension Lender Fees: 0.75%
Amortization: Interest Only
LTC: 75%
Guaranty: Recourse
Prepayment Penalty: None- Advisors: Zachary Streit
-
$8,000,000 Cash Out Refinance of a Multifamily Renovation; Los Angeles, CA
June 26, 2019
George Smith Partners arranged $8,000,000 in cash out financing for a multifamily property in Los Angeles. The Sponsors’ goal was to quickly purchase, renovate and lease the Property. Due to the competitive market for multifamily in Los Angeles, six months ago, GSP arranged an expensive, quick-close financing to allow our Sponsors to complete the purchase of the subject property faster than their competitors. GSP financed the property at 80% of purchase price with a private debt fund. Now, GSP has refinanced the Property allowing the Sponsor to recover the capital invested in renovation and tenant buy-outs. This financing now reduces the cost of capital and allows the Sponsor to receive cash out to cover all capital expenditures. Most lenders would have required additional seasoning or limited the cash out. Through utilizing GSP’s relationships and the competition GSP created in the market, the Lender was willing to provide the requested capital.
Rate: 5.25%
Term: 3 Year
Amortization: 30 Year
LTV: 70% LTV
Guaranty: Recourse
Lender Fee: None- Advisors: Bryan Shaffer Max Lehrman Ruben Bohbot
-
$13,500,000 Non-Recourse Cash-Out First Mortgage 14-Day Close on a Vacant Building; in Los Angeles, CA
June 19, 2019
Transaction Description:
George Smith Partners arranged a $13,500,000 non-recourse, cash-out first mortgage from a REIT to refinance out a maturing bank loan on a 36,600 square foot vacant building located along a major thoroughfare in Hollywood, California. The building had previously been 100% occupied by a now defunct retailer and this loan provides up to 18 months of term for the Sponsor to source a replacement tenant. The loan repaid existing debt, covered 100% of closing costs, and repatriated substantial equity to the Borrower. Although this loan is non-recourse, the Lender did not require an appraisal or other third-party reports, nor did it require an interest or carry reserve despite no in-place cash flow. Sized to 60% of value, the loan priced at 6.90% fixed for the initial 12-month loan term.
Rate: 6.90% Fixed
Term: 12 Months with One, Six-Month Extension Option
Amortization: Interest Only
Loan to Value: 60%
Lender Fee: 1.00%
Prepayment: Open Full Term
Guarantee: Non-Recourse -
Acquisition Bridge Loan, 73% Loan to Cost for a 13 Unit Multifamily Property in South Los Angeles, CA
June 12, 2019
Transaction Description:
George Smith Partners arranged acquisition bridge financing for a value-add multifamily property in the Westmont Neighborhood of South Los Angeles, California. The 13 unit, 1950’s vintage Property had significant deferred maintenance and below market rents. The Sponsor’s business plan was to reposition the Property and release the units at market rents. Sized to 73% of total project cost, the financing includes 100% of future funding for a full gut renovation of unit interiors and an exterior upgrade.
The two year bridge loan is interest only and floats at Prime plus 0.5% (6.00% today) with no prepayment penalty. Interest is not charged on the holdback until funds are drawn. The Lender only required a recourse obligation from the general partner who represented 10% of the equity, even though there were limited partners representing over 25% of the equity. The lender fee was negotiated down to 0.5%.
Rate: Prime + 0.5%
LTC: 70% / 65%, including 100% of future funding
Term: 2 Years
Amortization: Interest Only
Prepayment Penalty: None
Recourse: Full Recourse
Lender Fee: 0.5%- Advisors: Zachary Streit
-
$13,944,000 ($1,180/SF) Non-Recourse Construction Financing for the Redevelopment of a Former Single-Tenant Office Property in Santa Monica, CA
June 12, 2019
Transaction Description:
George Smith Partners placed $13,944,000 in non-recourse construction debt for the conversion of a former single-tenant office property into an 11,800 square foot, luxury, multi-tenant retail property in a prime submarket of Santa Monica, California. GSP diligently worked to source a lender comfortable with funding a loan at a high basis of $1,180/SF for a “first-mover” redevelopment that was 64% pre-leased (on an economic basis) at record-setting rents to a mix of local and regional food and fitness users. Further complicating the loan request was the need to allocate separate components of the “bad boy” non-recourse carve-outs among two unrelated guarantor entities. Approximately 55% of the loan proceeds were future funded with no interest paid on unfunded loan proceeds until drawn.
Rate: One-Month LIBOR + 4.25% (6.75%) at closing burning down to One-Month LIBOR + 3.75% (6.25%) upon stabilization
Term: Three-year initial term plus two one-year extension options
Amortization: Interest only
Debt Yield: 8.5% stable debt yield
LTV: 70% as-complete value, 60% as-stable value
Prepayment: Open prepayment with 24-month spread maintenance
Guaranty: Non-Recourse
Lender Fee: 1% -
Cash-Out Refinance at 4.35% Fixed for Seven Years, Non-Recourse; Downey, CA
June 5, 2019
Transaction Description:
George Smith Partners secured the cash out refinance of a 15-unit stabilized multifamily property in Downey. Constructed in 1980 the Property is located in the heart of Downey, close to restaurants and retail centers. Fixed at 4.35% for seven years, the non-recourse loan floats at 6-month LIBOR + 2.25% for the remaining 23-year term. The non-recourse loan has 3 years of interest only payments and a 4,3,2,1 step down prepayment penalty.
Rate: 4.35% Fixed for 7 years; 6 Month LIBOR + 2.25% thereafter
Term: 30 years
Amortization: 3 years interest only, followed by 27 years amortization
Prepayment Penalty: 4,3,2,1
LTV: 55%
DCR: 1.15x
Guarantee: Non-Recourse
Origination Fees: Par -
$4,050,000 (85% LTC) Financing for the Acquisition of 3 Contiguous Parcels in Los Angeles, CA
June 5, 2019
Transaction Description:
George Smith Partners secured a $4,050,000 acquisition loan for 3 contiguous multifamily buildings located in Toluca Lake (Los Angeles), CA. While there are currently 11 units on the 3 parcels, the Sponsor is in the process of designing a 57 unit multifamily project. This development is allowed “by right” but must go thru planning commission for final approvals and will utilize the density bonus regulations. The proposed building will feature a mix of 1 and 2-bedroom units and will provide more rental housing for the local community. The final project will have an affordable component, boosting the supply of units for designated for low income tenants. The Project is walking distance to the Universal City metro rail stop. Nearby employers include Universal Studios, CBS, and Warner Brothers.
The non-recourse financing was sized to 85% of purchase price at an interest rate of 9.50% for 18 months for a 1.5% lender fee. The high leverage loan allowed the Sponsor to minimize their initial equity investment into the deal. The Sponsor plans to replace this loan with construction financing once the Project is ready to break ground. This Lender has the ability to convert some or all of their acquisition loan to a mezzanine position up to 85% of total construction cost behind the future construction loan.
Rate: 9.50% Fixed
LTC: 85% of Acquisition Price
Term: 18 Months
Amortization: Interest Only
Prepayment Penalty: 9 Months of Minimum Interest
Recourse: Non-Recourse
Lender Fee: 1.5%- Advisors: Steve Bram Patrick O’Donnell
