Transaction Description:
George Smith Partners secured $11,300,000 in proceeds for the acquisition of a 76-unit multifamily property in a tertiary market outside of Salt Lake City, UT. The bridge loan is structured as $10,795,000 at close and $505,000 in future funding. The fully funded proceeds represent 70% LTC. The loan floats at a rate of LIBOR + 3.15% with a 0.10% floor on LIBOR.
GSP encountered several challenges when discussing the deal with capital providers. Some lenders quoted a spread as high as 3.65% over LIBOR. Other lenders quoted proceeds less than $10,000,000 because they require a 7.5% exit debt yield. Some lenders considered the market to be too small.
GSP was able to source a lender that provided very competitive pricing, an exit debt yield of only 6.50%, and an easy close process. The loan closed in about 60 days without any changes to the signed term sheet.
- Rate: Floating at LIBOR+3.15% with a 0.10% LIBOR floor
- Term: 2+1+1+1
- LTV: 71% in/67.5% stabilized
- LTC: 70%
- Debt Yield: 4.75% in/6.50% out
- Guaranty: Non-Recourse
Advisors
