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Financings

Recent Financings

  • $3,925,000 Non-Recourse 21-Unit Multifamily Acquisition Financing; Los Angeles, CA

    January 18, 2022

    Transaction Description:

    George Smith Partners sourced a $3,925,000 loan for the acquisition of a 21-unit property in West Los Angeles. The loan provided 65% leverage and is fixed at a rate of 3.15% for 3 years. The Lender gave the Borrower full credit for newly signed leases and was able to underwrite to the most recent month’s income. Net operating income was underwritten at the actual note rate, which resulted in higher proceeds compared to other lenders. The Property had some deferred maintenance, but the Lender was willing to have the Borrowers complete it after closing. The 3-year declining prepay fit with the Borrower’s value-add business plan.

    Rate: 3.15%
    Term: 10 years
    Amortization: 3 years Interest Only followed by 30-year amortization
    Prepayment Penalty: 3,2,1,0%
    Guaranty: Non-Recourse

  • $27,300,000 Non-Recourse Construction Financing for Multi-Tenant Spec Industrial Development; Mesa, AZ

    January 18, 2022

    Transaction Description:

    George Smith Partners arranged $27,300,000 in non-recourse construction financing for the development of a 173,193 SF, Class-A, light industrial project in Mesa, AZ. The Project will consist of smaller unit sizes in 10 total buildings ranging in size from 2,500 to 15,000 SF.

    Challenges:

    This Project was built entirely to spec. Tenants signing smaller leases typically do not pre-lease space before a project breaks ground. Due to supply chain constraints and inflationary pressures, raw materials and labor costs increased significantly. While there have been many large box industrial projects developed in the market, there has been limited development of small bay product and therefore limited comparable lease and sales transactions. Most of the Sponsor team are foreign nationals whose assets lie outside of the United States.

    Solution:

    GSP successfully obtained several financing options and selected a lender who had flexible execution, a strong understanding of the growing demand for small bay industrial space and was comfortable with rising construction prices. GSP arranged a co-guarantor to subsidize the non-recourse carve-out guarantees.

    Rate: L + 6.50% with 0.10% Floor
    Term: 24 months + (1) 6-month extension
    LTC: 80%
    2% origination fee, 0% exit fee

  • $30,875,000 Construction Financing (65% LTC) for Assisted Living and Memory Care Facility; Southern California

    January 12, 2022

    Transaction Description:

    George Smith Partners arranged financing for the construction of a Class-A Assisted Living Facility in Southern California. The Facility was designed similarly to a 4-star hotel property with luxury interior design and a top tier culinary program. Amenities include: gourmet exhibition kitchen and dining area, wellness center, full service spa, hair salon, landscaped outdoor space, private dog park and dog services. The Sponsors have made a tremendous effort to offer a one-of-a-kind experience, with residents being able to tend their own vegetable gardens, attend wellness classes and more. The Facility will also be able to accommodate residents who require memory care.

    This is the sponsor’s first Assisted Living project. GSP was able to structure a strategic partnership to boost the experience profile of the Sponsor. This was essential for the capital provider to get comfortable with the project.

    The financing structure provides flexibility to the Sponsor; after an initial 18-month construction term, the Sponsor can extend the construction loan for 6 months. After construction, the loan converts to a 24-month bridge loan during lease up/stabilization for a total loan term of up to 4 years.

    Interest Rate: Prime Rate + 0.50%
    Term: 18-Month Construction Loan with 6 Month Extension Option (0.25% Extension Fee)
    Converts to 24-Month Bridge Loan During Stabilization at No Additional Fee
    LTC: 65%
    Amortization: Interest-Only
    Lender Origination Fee: 0.75%
    Guaranty: Recourse
    Prepayment Penalty: None

  • $6,225,000 Construction-to-Perm Multifamily Financing; Los Angeles, CA

    January 12, 2022

    Transaction Description:

    George Smith Partners successfully placed construction-to-perm financing of $6,250,000 for the development of a 19-unit multifamily community in West Los Angeles, CA. The 4-story building will provide 1, 2 and 3-bedroom units in a supply-constrained submarket. The recourse loan provides for two-years of interest-only financing with a 6-month extension that converts to a perm loan with a combined term of 10 years. The starting rate is fixed for 7 years then amortizing. The loan represents 60% of stabilized value and 70% of cost and allows for open prepayment based on a prepayment fee of 2%,2%,1%,1% in years 1 to 4. The Project will be Type-V construction consisting of 4-stories, a rear 750 SF community courtyard, partial ground level and partial subterranean parking. Unit mix includes studio, one and two-bedroom units including two low-income units. All units include covered patios however non-studio units include larger than average outdoor living terraces that range from 130 to 193 SF. Community amenities include a rear courtyard with firepit lounge and BBQ grill. The units average 654 SF in size. The Project represents the Client’s second multifamily construction project. GSP was able to assist in bringing in a qualified general contractor and get the Lender comfortable with the Borrower’s ability to execute despite their limited development track record.

    Rate: 3.6% Fixed 7-years
    Term: 10 years
    Amortization: Interest-Only Years 1-2 then 30-year amortization
    Extensions: One 6-Month Option
    Guaranty: Recourse
    Prepayment: 2%,2%,1%,1%
    Loan Fee: 1%

     

  • $13,000,000 Non-Recourse Construction Financing for a 144,000 SF Industrial Property; Madera, CA

    January 12, 2022

    Transaction Description:

    George Smith Partners successfully arranged the non-recourse, construction financing of a 144,000 SF flex-industrial property in Madera, California. The Property is a 74-unit flex industrial/warehouse that will target the underserved small-scale user. The Sponsors are capitalizing on the very low vacancy rate in the Madera/Fresno industrial market. The Sponsors are very knowledgeable in this market, but have not completed a ground-up construction project. Their lack of direct experience and the smaller market made it difficult for many lenders to provide financing. George Smith Partners was able to educate the selected Lender on the need for this product in this market and the industrial experience of the Sponsorship. This allowed the Lender to get comfortable with the transaction and provide very favorable financing.

    Rate: 7.00% + LIBOR
    Term: 24 Months with Two Six-Month Extension Options
    Amortization: Full Term Interest Only
    LTV: 65%
    LTC: 70%
    Prepayment: 12 Months’ Minimum Interest
    Guaranty: Non-Recourse

  • $13,000,000 Non-Recourse Construction Financing for a 144,000 SF Industrial Property; Madera, CA

    January 5, 2022

    Transaction Description:

    George Smith Partners successfully arranged the non-recourse, construction financing of a 144,000 SF flex-industrial property in Madera, California. The Property is a 74-unit flex industrial/warehouse that will serve the underserved small-scale user. The Sponsors are capitalizing on the very low vacancy rate in the Madera/Fresno industrial market. The Sponsors are very knowledgeable on the market but have not yet completed a ground-up construction project. Their lack of direct experience and the smaller market made it difficult for many lenders to provide the financing. George Smith Partners was able to educate the selected lender on the need for this product in the market and the industrial experience of the Sponsorship which allowed them to get comfortable with the transaction and provide very favorable financing.

    Rate: 7.00% + LIBOR
    Term: 24 Months with Two Six-Month Extension Options
    LTV: 65%
    LTC: 70%
    Amortization: Full Term Interest Only
    Prepayment: 12 Months’ Minimum Interest
    Guaranty: Non-Recourse

  • $9,000,000 for the Refinancing of a 7,100 SF Office; Southern California & 28,500 SF Industrial Facility; Colorado

    January 5, 2022

    Transaction Description:

    George Smith Partners successfully secured $9,000,000 for the refinancing of two single-tenant assets in Southern California and Colorado. The Southern California industrial property had challenges due to the high dollar per square foot. The Colorado asset had challenges due to the tertiary location. In addition, the tenant for both properties had credit issues.
    Despite the risks associated, GSP was able to successfully navigate these hurdles. This execution is fixed at 4.25% for 5 years and was sized to 75%.

    Rate: SWAP + 3.00% (floor of 4.25%).
    Term: 10 Years
    LTV: 75%

  • $13,500,000 Cash-Out Refinance of 132-Unit SRO Property; Los Angeles, CA

    December 15, 2021

    Transaction Description:

    George Smith Partners successfully placed $13,500,000 in cash-out permanent financing for a 132-unit single room occupancy (SRO) located just outside of Downtown Los Angeles. SROs are like apartment buildings expect some of the units have shared bathrooms, similar to a dorm. The Sponsor approached GSP to help assist with the refinance of the Property to take out their expensive lender, while receiving cash out.

    Since the Property is unique, it was important that GSP identified a lender who understood SRO properties, while delivering competitive terms. At the time of the refinance, the Sponsor had just completed exterior and interior renovations, including common area upgrades. Utilizing its extensive relationships, GSP was able to provide the Sponsor with a 7-year term, with all 7 years being fixed at a low rate of 3.875%. The first 24 months are interest-only, before converting to 30-year amortization thereafter. There is additional flexibility within the loan structure because there is no prepayment penalty. With over $2 Million in cash out, the Sponsor still lowered their monthly debt service. The cash-out loan allows the Sponsor to continue to grow their multifamily portfolio. Thanks to GSP’s long-standing relationship with this Lender, we were able to meet the Sponsors deadline and close this transaction within 45 days.

    Rate: 3.875 % fixed for 7 years
    Term: 7 Years
    Min. DCSR: 1.25x
    LTV: 75%
    Prepayment: No prepayment penalty

  • $5,512,000 Construction Financing for 25-Unit Multifamily Development; Los Angeles, CA

    December 8, 2021

    Transaction Description:

    George Smith Partners secured $5,512,000 of senior construction financing for the development of a 6-story, 25-unit ground-up multifamily building. The Transit Oriented Development (TOD) multifamily Project is within three blocks of the Wilshire/Western Metro station situated in the Koreatown neighborhood of Los Angeles.

    Compared to other areas in Los Angeles, Koreatown has seen a temporary influx of new units in the marketplace. The new supply, coupled with the pandemic, has slowed the rapid rental growth the sub-market has become known for. As a result, there was some hesitation from lenders. GSP generated a wide capital market that allowed the Sponsor to consider several options for the development of the Project. The strong financial position of the Sponsor, along with the extensive relationship with their general contractor, contributed to both pricing and leverage. The 36-month recourse financing is priced at 4% and structured with two, 12-month extension options.

    Rate: 4%
    Term: 3+1+1
    LTC: 55%
    Guaranty: Full Recourse

  • $14,370,000 Non-Recourse Bridge Financing for a Multifamily Asset; Los Angeles, CA

    December 8, 2021

    Transaction Description:

    George Smith Partners successfully arranged $14,370,000 in bridge refinancing for a 48-unit garden-style apartment community in the heart of Inglewood, Los Angeles. The Property is located less than 10 minutes from the newly constructed, high-traffic SOFI Stadium – 80,000 seats and home of the Los Angeles Rams and Chargers football teams. The Sponsor plans to renovate several non-vacant units in the building which are scheduled for tenant buyouts over the coming months, along with renovating vacant units to bring rents up to market. There is over a 50% rental upside from the current rent roll. The recapitalization provided future funding for capital expenditures and related overhead costs.

    The Greater Inglewood submarket has maintained low vacancy rates at or below 4% for the past decade. The Sponsorship team recognized the Property’s underlying value, bolstered by low vacancies and subsequent demand in a rapidly developing submarket. GSP was able to identify a Lender who understood the added value of the proposed business plan, sheer lack of more affordable housing in the Metro, and Inglewood’s fast-growing market. The loan carried a 3-year term priced at 1 Month Libor + 355 basis points with a 0.25% floor and notably, included a significant cash-out to the Sponsor.

    Rate: L+355 (0.25% Floor)
    Term: 36 Month Term (2, 12-Month Extension Options)
    Origination/Exit Fee: 1.00% / 0.50%
    Guaranty: Non-Recourse

  • $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