$10,800,000 Refinance of 4-Property Portfolio; Fixed For 7 Years Between 3.2 – 3.4%; Full-Term Interest Only; All Third-Party Costs Waived; Los Angeles, CA

Rate: 4 loans with rates between 3.21% and 3.40%
Term: 7 years fixed
Amortization: Full-Term Interest Only
LTV: 55%
DCR: 1.40x
Prepayment Penalty: Yield Maintenance
Lender fee: 0% origination fee and all third-party costs waived
Guaranty: Non-Recourse

Transaction Description:

George Smith Partners placed the $10,800,000 refinance of four stabilized Los Angeles multifamily properties totaling 86 units. The interest rates varied between 3.21% and 3.40%, depending on the affordability of the units at each property. The loans have full-term interest only payments.

The Sponsor completed renovation budgets which were used to separate out capital expenditures from recurring R&M expenses. This adjustment helped to provide support for the Lender’s underwritten cash flow and property values. Two of the Properties moved into a lower LTV tier which resulted in an interest rate reduction post-application. One of the four Properties recently achieved stabilization, which meant the Property only had one month of operating history. GSP emphasized the strength of the Sponsor and the LA market and the Lender was able to use a “T-1” income statement. The Lender waived all charges for closing costs and third-party reports, which typically cost more than $5,000 per transaction. This resulted in savings of more than $20,000 across the whole portfolio. The Property Condition Reports showed some minor deferred maintenance items, but the Lender allowed most of them to be resolved post-closing.


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