Financings

Recent Financings

• Cash Neutral Refinance for Multifamily Property; Los Angeles, CA

  May 31, 2023

  Transaction Description:

  George Smith Partners successfully secured a cash neutral permanent refinance loan for a 12-unit multifamily property in Los Angeles. Due to current market conditions, in which many regional banks are not lending, GSP had to expand its list of capital sources. A national bank was found that provided enough proceeds to pay off the in-place loan plus fees. The loan has 5 years of Interest Only payments on a 7 year fixed rate term. The lender provided non-recourse financing without charging any rate premium compared to a recourse loan. The loan closed in 26 days from application, which may be a record for a bank loan.

  Rate: Fixed at 5.71% for 7 Years
  Interest Only: 5 Years
  Prepayment: 4433211
  LTV: 60%
  DCR: 1.25x
  Guaranty: Non-Recourse

  • Advisors: Matthew Kirisits Nikola Kretschmann

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• Acquisition Financing for a 10-Acre Entitled Multifamily Site; Western State

  March 29, 2023

  Transaction Description:

  George Smith Partners secured an acquisition bridge loan for the acquisition of 10 acres in Laveen, AZ that will be developed with a Humphrey’s designed, 250-unit resort-style multifamily community. The $4,500,000 loan funded 100% of the purchase price plus an interest reserve. The site was put under contract in October 2020 “unentitled” but part of a 35-acre master plan community that includes a 16-bed hospital facility, Big O’ tires, and land for future senior housing development and restaurants. The 35-acre site has a “main and main” location in Laveen which has seen tremendous growth since the opening of Loop 202, a new freeway that connects Laveen and other South Phoenix communities with Interstate 10. The Sponsor fully entitled the site during escrow which included the annexation of 6 of the 10 acres from County to City property.

  GSP also advised on the acquisition and procured over $2,000,000 of Co-GP equity to complete predevelopment of the site. GSP was able to find a non-recourse senior lender for the land acquisition that gave 100% value to approximately $2,500,000 of imputed equity. The Sponsor, a Phoenix-based development firm with over 60 years of development experience, will complete its value-engineering during the term of the land loan while GSP procures construction financing.

  Rate: 11.75% Fixed
  Term: 12 + 6 Month Extension
  Origination Fee: 1.5%
  Prepayment: Allowed with 6-Months Minimum Interest
  Amortization: Interest Only
  Guaranty: Non-Recourse

  • Advisors: Alina Mardesich

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• $4,150,000 Acquisition Financing for Multi-Tenant Retail Center; Charlotte, SC

  March 22, 2023

  Transaction Description:

  George Smith Partners arranged $4,150,000 in fixed-rate acquisition financing for a 100% occupied, 12,558 square foot, 4-tenant, Starbucks-anchored retail center in South Carolina. Located just across the border from North Carolina in suburban Charlotte. The contemporarily designed, 2019-built center is well located with a high traffic count, solid demographics, and includes daily needs that tenants appropriate to its suburban location. Starbucks occupies the end cap and other tenants include an investment-grade urgent care facility, a wine and food bar, and a nail salon. GSP sourced a lender that would provide a 10-year term, with a 5-year fixed rate, and no prepayment penalty, in order to give the sponsor maximum flexibility.

  Rate: 5.66% Fixed for 5 years
  LTV: 57%
  Term: 10 Years
  Origination Fee: 0.25%
  Amortization: 30 Years
  Prepayment: Open
  Guaranty: Recourse

  • Advisors: Steve Bram David R. Pascale, Jr. Allison Higgins Nick Rogers

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• Bridge Financing for Cash-Out Refinance of a Special Purpose Property; Los Angeles, CA

  February 21, 2023

  Transaction Description:

  George Smith Partners successfully advised on the placement of a $1,850,000 cash-out refinance of a 72,471 SF commercial condominium comprising 4-levels of public parking and storage facility located within a 38-story residential high-rise in downtown Los Angeles. Although the property is stabilized, lenders expressed concerns over the condominium collateral, special-purpose, and negative cash flow history during COVID.

  GSP was able to get a Lender comfortable with the sustainability of the net operating income vis-a-vie the Borrower’s ownership and near-stabilization of its 3-levels of commercial, retail, and office space located within the same project. The Sponsor’s primary objective was to refinance and lower their cost of capital which was previously at 9%. GSP was able to successfully replace the loan with a non-recourse bank loan at 5.14% fixed in addition to providing $350,000 in cash-out proceeds. The rate was locked at the beginning stages of the upward trend in interest rates and GSP was able to get the bank to accommodate an additional rate lock extension.

  Rate: 5.14% Fixed
  Amortization: 30 Years
  Term: 7 Years
  Guaranty: Non-Recourse

  • Advisors: Alina Mardesich

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• Land Financing for Entitled Land; Los Angeles, CA

  February 8, 2023

  Transaction Description:

  George Smith Partners secured a $5,100,000 land loan entitled for a 69-unit multifamily building slated to begin ground-up construction in late 2024. The borrower purchased the original parcel 17 years prior as a fully occupied 32-unit property; since then, the building has been vacated and demolished. To achieve full-term proceeds, the appraisal needed a land value above the original PSA, including the previous building collateral. GSP utilized a broad comp set of per-acre comps, leaning on footprint analysis instead of per-unit. Additionally, the lender’s due diligence concluded there was value creation through both the fully approved entitlements and the fact the Sponsor was able to achieve a condo tract map, giving them optionality for apartments or for-sale units.

  Rate: 7.75% Fixed
  LTV: 50%
  Term: 18 Months + Two 6-month Extension Options
  Origination Fee: 0.75%
  Prepayment Fee: None
  Guaranty: Recourse

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• $38,500,000 Cash-Out Refinance of 98% Leased Grocery-Anchored Retail Center; Utah

  February 1, 2023

  Transaction Description:

  George Smith Partners successfully placed $38,500,000 of floating-rate debt for the cash-out refinancing of a 372,000 square foot grocery-anchored retail center located in Utah. Fully leased and anchored by tenants like Super Target, Best Buy, and PetSmart, the Property boasts a dominant submarket position owing to its diverse assortment of community-oriented tenants and main-and-main location. Additionally, the Sponsor had expertly navigated the difficult market conditions caused by the Covid-19 pandemic, notably through subdividing and re-leasing 45,000 SF of space to credit-rated tenants at a rent 70% higher than the previous occupant, which had vacated due to bankruptcy. Loan proceeds were used to pay off existing debt, fund tenant improvements, and leasing commissions, and repatriate Sponsor equity.

  Most non-CMBS lenders contacted had sought a full repayment guaranty because of the retail asset class. However, GSP successfully sourced a flexible lender willing to structure recourse with a 25% springing repayment guaranty, which would only come into effect only if an anchor tenant terminated their lease or ceased operations. Furthermore, the Property’s strong sponsorship and well-executed business plan effectively aided GSP to source debt with an extremely competitive rate and significant cash-out at close.

  Loan Term: 5 Years, 1 year I/O
  Rate: SOFR + 2.46%
  LTV: 65%
  Fee: 1%

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• Unentitled Land Financing for Infill Multifamily Development; Los Angeles, CA

  January 25, 2023

  Transaction Description:

  George Smith Partners successfully closed a 1st and 2nd Trust Deed at 85% of the purchase price for unentitled land in the Koreatown neighborhood of Los Angeles, CA. The two loans have a blended rate of 9.98% for the twelve-month initial term. The Sponsor will have a six-month extension option available. GSP was able to identify two lending sources, to maximize leverage, who understood the market and the demand for multifamily development in this location.

  First Trust Deed
  Rate: 8.90% Fixed
  Term: 12 months with One 6-month Extension Option
  LTV: 65%
  Amortization: Interest Only
  Origination Fee: 1.00%
  Exit Fee: None
  Prepayment: Open
  Guaranty: Non-Recourse

  Second Trust Deed
  Rate: 13.50% Fixed
  Term: 12 months with One 6-month Extension Option
  LTV: 65% – 85%
  Amortization: Interest Only
  Origination Fee: 3.00%
  Exit Fee: None
  Prepayment: 6 Months Minimum Interest
  Guaranty: Non-Recourse

  Blended Debt
  Rate: 9.98% Fixed
  Term: 12 Months with One 6-month Extension Option
  LTV: 85%
  Amortization: Interest Only
  Origination Fee: 1.47%
  Exit Fee: None
  Guaranty: Non-Recourse

  • Advisors: Steve Bram David R. Pascale, Jr. Allison Higgins Nick Rogers

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• $50,250,000 Acquisition Bridge Financing for a Multifamily Portfolio; Houston, Texas

  January 19, 2023

  Transaction Description:

  George Smith Partners secured $50,250,000 for an acquisition bridge loan for a two property multifamily portfolio in Houston, Texas. To meet the seller’s 38-day closing requirement, GSP used experience and relationships to quickly identify and close this financing within the required timeline. GSP was able to execute the Sponsor’s business plan and secure a high leveraged bridge loan at 30-day Term SOFR + 4.50%. The loan was cross collateralized with both properties, which totaled 736 Units. The Properties were operating at a going-in 5% debt yield when we closed. This interest-only loan included 100% of the capital needed for rehab.

  Challenge: There were multiple challenges regarding timing, leverage, crime, and property specific issues. In addition, the overall bridge debt and CLO markets have had major disruption. GSP aided a local family office, an international fund, and a strong local operating partner who teamed up to purchase this asset as part of a 1031 exchange that GSP financed 16 months prior. In addition, several lenders were over allocated in the Houston market and could not handle the size of this portfolio.

  Solution: GSP focused on the top lenders that we had closed within the past because of importance of closing with the 1031 exchange. Due to our great relationships, GSP was able to quickly pick the best lender and expedite the application process. GSP assisted the Sponsorship team in developing a strong business plan. This included proving the benefits of the multiple sponsorship structure, as well as getting the Lender comfortable with the local partners to operate the properties. GSP understood the dynamics of each sponsorship team and helped the Lender upstand the strategy of operating the Properties as one asset. GSP knew by bundling the two properties together and creating a larger transaction that it would be more appealing to lenders. This would enable lenders to increase proceeds and decrease pricing as compared to financing two separate smaller transactions. GSP ultimately utilized one of our relationship lenders who was willing to invest the upfront time and place aggressive bridge financing, with appealing leverage, proceeds, and terms of 2 years interest-only.

  Rate: 30 Day Term SOFR + 4.50%
  Term: 24 Months, with two 1 Year Options
  Amortization: Interest Only
  LTC: 73%/ 80% Loan to Purchase Price
  Guaranty: Non-Recourse
  Prepayment Penalty: 12 Month

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• Permanent Multifamily Financing; Los Angeles, CA

  January 11, 2023

  Transaction Description:

  George Smith Partners arranged $3,800,000 in permanent financing for the refinance of a stabilized 39-unit multifamily property in Los Angeles, California. The Sponsor locked rate in early summer of 2022 during a time of rapidly increasing interest rates. Due to some unforeseen events, the transaction got delayed multiple times. GSP was able to get the rate lock extended multiple times due to our relationship with the Capital Provider. The rate lock was extended without a single increase to the rate or any additional fees. The loan includes a flexible prepayment penalty structure that allows the Sponsor plenty of options during the next 5 years as well as over $1,500,000 in cash-out proceeds.

  Rate: 4.25%
  Term: 5 Years Fixed
  Amortization: 30 Years
  Prepayment Penalty: 3/2/1, Then Open
  Deposits Required: None
  Guaranty: Non-Recourse

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• $3,830,000 Refinance of a 11-Unit Multifamily Property; Los Angeles, CA

  January 5, 2023

  Transaction Description:

  George Smith Partners arranged $3,830,000 in permanent financing on a newly stabilized 11-unit multifamily property located in Austin, TX. The loan is fixed at a rate of 6.00% for 10 years and a 3-3-3-2-1 prepayment structure. Although some lenders were hesitant to provide competitive permanent financing terms on a former condo multifamily property with less than a year of operating history, GSP was able to source competitive financing ahead of the rising interest rate environment with flexible prepayment. Thanks to our long-standing relationship with this repeat lending relationship, GSP was able to meet the Sponsor’s deadline and close this transaction within 43 days from signing the term sheet.

  Rate: 3.50%
  Term: 10 Years
  LTV: 70%
  Prepayment: 5, 4, 3, 2, 1%

  • Advisors: Matthew Kirisits

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• Acquisition Financing and JV Equity for 57.62 Acres of Vacant Land; Cibolo, TX

  December 22, 2022

  Transaction Description:

  George Smith Partners successfully placed the land acquisition senior loan and JV equity for 57.62 AC of vacant and unentitled land in Cibolo, TX (suburb of San Antonio). We went out to 40+ sources and the Lender loved the site and was aggressive by bringing the effective financing between debt and equity to about 78% LTP. The deal is in the early stages, with no clear exit plan and most lenders were not comfortable with taking on that risk. Initially, the Sponsor was under LOI to flip 30 acres to a tech-related entity post close, however, that fell through when we were already under app. Regardless, the site was highly favored after putting their feet on the ground and closed on the original structure.

  Senior Loan
  Term: 12 Months
  Guaranty: Non-Recourse

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• Land Acquisition Financing for 6.8-Acre Development Site; Denver, CO

  December 22, 2022

  Transaction Description:

  George Smith Partners successfully placed $6,000,000 (66% Loan to Purchase Price) in acquisition land financing for a 6.8-acre site to be developed into 120 units in the Denver Metropolitan area. An infill site originally zoned agricultural; the Sponsor invested significant time and capital to change the site’s use to residential. The ability to develop attainable housing is the driver for both the city and the developer, as the finalized project will provide much-needed affordable housing to the increasingly expensive Denver Metro. With preliminary entitlements achieved, the Sponsor is working through civil engineering to receive final entitlements and sell the fully-entitled site to a well-known build-to-rent developer.

  GSP was able to source debt with favorable leverage, a fixed-rate, and most importantly, without the need for an appraisal.

  Term: 12 Months
  Rate: 9.25% Fixed
  LTV: 66%
  Prepayment: No Prepay
  Guaranty: Non-Recourse

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