Rate: 3.00% Fixed
Term: 5 Years
Amortization: 3 Years Interest-Only
Prepayment: 3, 2, 1%
George Smith Partners secured $11,258,000 for the refinance of a seven-property multifamily portfolio in Los Angeles, CA. The loans are non-recourse and fixed at 3.00% for 5 years with 3 years of interest-only payments. The Sponsor received a significant return of equity. The loans went into app about 5 months ago, prior to the recent increase in interest rates. Because of GSP’s strong relationship with the Lender, the Lender held the original 3.00% fixed rate.
Managing Director & Chief Operating Officer, AXCS Capital
Managing Director & President, AXCS Advisors
Senior Vice President
Director of Research & Marketing
$3,925,000 Non-Recourse 21-Unit Multifamily Acquisition Financing; Los Angeles, CA
January 18, 2022
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.
Term: 10 years
Amortization: 3 years Interest Only followed by 30-year amortization
Prepayment Penalty: 3,2,1,0%
$14,370,000 Non-Recourse Bridge Financing for a Multifamily Asset; Los Angeles, CA
December 8, 2021
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%
$37,500,000 Non-Recourse, Stretch Senior Construction Loan for a Mixed-Use OpZone Development; Western States
September 22, 2021
George Smith Partners placed a $37,500,000 non-recourse, stretch senior construction loan for a 7-story ground-up development of a mixed-use OpZone Project. When complete, the Project will consist of 151 apartment units (including 14 Live/Work Lofts), approximately 15,000 sf of restaurant space, 10,000 sf of retail, and 12,000 sf of office space. The average apartment size is 730 sf, and most units will have private balconies with unobstructed views of the desert and city.
As the Project is a first of its kind in the surrounding area, finding appropriate comparable projects that would speak to the strength of this market proved to be a challenge. GSP focused on the Project as a marquee development and detailed the new employment opportunities from Google, and a hospital expansion, sports training facility, along with the emerging renaissance happening within the downtown area. GSP was able to demonstrate the immense intrinsic value from the ongoing renovation of the City Hall Plaza and Events Center — a 500-seat canopied amphitheater and 60,000 sf of programmable deck area for hosting community events — that sits directly across from the Project. GSP also worked through the Sponsor’s GMP budget with the Lender during a period of escalating cost, showcasing the strength of the Sponsor group in their local market. In turn, this created a comfort level needed by the Lender with regards to the commercial space of the Project.
GSP executed a broad and in-depth marketing campaign to help capital markets understand the opportunity appropriately. These efforts resulted in a successful close with proceeds achieving the Sponsorship’s objective.
Stabilized Loan-To-Value: 70%
Term: 24 Months + 6 Month Extension
$33,000,000 Stretch – Senior Non-Recourse Construction Loan for Ground-Up Luxury Condominiums; Los Altos, CA
September 15, 2021
George Smith Partners successfully advised on $33,000,000 in construction financing for a 27- unit luxury condominium project to be built in downtown Los Altos, CA. This high-end offering is the first larger scale project for the newly formed, but individually experienced sponsorship group. The Sponsor has significant historical ground-up experience and will self-perform as the General Contractor. GSP worked through several strategies with the Sponsor including preferred equity, mezzanine debt and an all in one, stretch-senior execution. Ultimately, GSP successfully obtained several highly reliable options for each strategy and the Sponsor selected an integrated full-service construction lender. GSP negotiated a land value contribution in excess of cost and as a result, the land lift allowed the Sponsor to invest less up-front equity than otherwise required to close the transaction.
The Sponsor projects completion of the project in late 2023. Due to the supply constrained market for the condo units, they expect the project to be completely sold out shortly thereafter.
Rate: L + 8.25% w/ floor of 9.0%
Term: 30 months
Prepayment Penalty: 9 months
- Advisors: Evan Kinne Ed Steffelin Miles Musalman Jordan Lipton
$45,570,000 Non-Recourse Construction Completion and Inventory Financing for a 77-Unit Residential Condominium Development; Downtown Los Angeles
July 7, 2021
George Smith Partners successfully arranged a $45,570,000 construction completion and inventory loan for a mixed-used residential condominium development project in the Little Tokyo neighborhood of Downtown Los Angeles. The non-recourse loan refinanced the existing construction debt, provided additional proceeds to complete the development, and additional term for unit sales. The 77-unit project features 2,400 square feet of ground floor retail and an 8,000 square foot rooftop amenity area. It is slated to deliver in Q2 2022.
GSP ran a robust process, fielded multiple proposals and was able to identify a lender with whom we shared a long-standing relationship offering favorable terms in a challenging market. The selected lender understood the story around recovery, the value of the asset due to a dearth of new condominium product in the market and the ability of the Sponsor to execute on the intended business plan.
All Terms Confidential
$12,083,000 Non-Recourse Cash-Out Agency Refinance for Multifamily Property; Western States
June 16, 2021
George Smith Partners successfully arranged the cash-out refinance of a 200+ unit multifamily property. The loan is floating at a starting rate of 2.56% and allows the Sponsor to complete a value-add strategy to increase the NOI and refinance into a permanent loan at higher proceeds in 18-24 months.
While processing the loan, GSP worked with the Lender to understand the historical cash flow which was extremely choppy due to the inconsistent rent payments during the Covid-19 pandemic. The analysis resulted in a $3,000,000 increase to the loan amount and an additional year of interest only payments.
Rate: 2.55% + SOFR
Term: 7 Years
Amortization: 3 Years Interest Only, 30 Year Am Thereafter
Prepayment: 1-Year Lockout, then 1%