$12,000,000 High leveraged Permanent Multifamily Financing in Tulsa, OK

Rate: 4.5% Fixed
Term: 7 Years
Amortization: 30-Year Amortization
LTV: 75%
Guarantee: Recourse
Prepayment Penalty: None

Transaction Description:
George Smith Partners successfully arranged the permanent financing for a class C, 350-unit apartment complex located in Tulsa, Oklahoma. The Sponsor sought a permanent loan to refinance the Property after spending a million in upgrades. The Sponsor’s goal was to lock in a long-term, low interest rate in a rising interest rate environment as the building was close to reaching stabilized occupancy.

Challenges:
The Sponsor had turned around a rough non-performing property and was in the process of completing the lease-up. In addition, the Sponsor’s syndication structure made financing more complicated because of the small shares of ownership.

Solution:
GSP was able to prove to the Lender the Sponsor’s successful track record with similar properties, highlight the Property’s growing position in the market and the strong rent growth. Because GSP has completed so many other deals with syndicators, we were able to structure the loan so that both the Sponsor and Lender were comfortable.

Advisors

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    $16,300,000 Permanent Multifamily Financing, Seven Years IO, 65% LTV; Boise, ID

    May 27, 2020

    Transaction Description:

    George Smith Partners placed $16,300,000 in cash out refinancing for a recently stabilized for-rent SFR development. The financing includes seven years of interest only, which will maximize cash flow for an asset located in one of the fastest growing markets in the United States. The Project is a key asset for the Sponsorship group which operates over 2,500 units throughout the mountain states and securing a low rate, higher leverage, take-out loan was an essential part of the long-term strategy of the company. GSP utilized our relationships to close the transaction in three weeks from a signed application.

    During the COVID-19 era we have seen significant changes to underwriting standards in comparison to 2019. These new requirements presented an underwriting challenge for the recently stabilized project as collections were increasing throughout 2020. GSP was able to demonstrate the Sponsors overall portfolio performance and three months stabilized occupancy to achieve maximum proceeds.

    Rate: 3.20%
    Term: 10 Year
    Interest Only: 7 years
    Amortization: 30 years
    Guaranty: Non-Recourse

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    $1,690,000 Freddie Mac Multifamily loan; Killeen, TX

    May 20, 2020

    Transaction Description:
    George Smith Partners secured $1,690,000 in Freddie Mac permanent financing for the acquisition of a stabilized 72-unit multifamily property located in Killeen, Texas. The Property is located four miles southeast of Fort Hood, the largest active-duty armored post in the U.S. military, occupying more than 218,000 acres of land in Bell and Coryell Counties.

    Challenges:
    As GSP went into application, the world was entering into the COVID-19 pandemic. Most lenders had either stopped lending or become much more cautious. Most agency lenders require Borrowers to have a track record with multiple projects before they will be considered for a Freddie Mac or Fannie Mae loan. In this case, the Sponosr was a first-time agency borrower. To make it even more challenging, the Property was in a small market with a high concentration of military personnel and the Sponsor required the ability to have prepayment flexibility.

    Solution:
    GSP used its relationship with a capital provider who closed multiple loans with our firm. GSP recently closed a loan in a similar small market and we were confident that they would understand the demographics and market characteristics. For this type of financing, the Lender’s typical structure is to offer a 10-year term with Yield Maintenance. Thanks to GSP’s long-standing relationship with this Lender, we were able to secure an attractive rate, high leverage, and a step-down prepayment of 3,1,0,0,0 on a 5-year term. The new capital allows the Sponsor to expand their Texas Multi-Family portfolio.

    Rate: 4.59%
    Term: 5 Years
    Amortization: 30 Years
    Prepayment: 3%, 1%, 0%

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    $60,100,000 Cash-Out Permanent Financing on a Newly Constructed 235-Unit Mixed-Use Apartment Community; St. Louis City, Missouri

    March 11, 2020

    Transaction Description:

    George Smith Partners successfully placed $60,100,000 in permanent debt to take out a construction loan and fund the buyout of a major equity partner on a newly built, mixed-use property located in the trendy St. Louis City neighborhood of The Grove. The 82% leverage loan is a combination of a $50,000,000 non-recourse senior loan to 70% loan-to-value and a $10,100,000 non-recourse mezzanine loan to 82% loan-to-value with a blended fixed-rate coupon of 4.89% for the duration of the ten-year term. The financing provided significant cash out to the Borrower that allowed both the buyout of a major equity partner as well as substantial cash-out above what was needed for the partnership buyout. Additionally, the financing structure replaced a recourse construction loan with a non-recourse, fixed-rate permanent loan with full-term interest only to maximize cash flow. GSP leveraged its expertise of the St. Louis market, long-standing lender relationships, and capital markets creativity to achieve the Borrower’s goals.

    Rate: Blended to 4.89%, Fixed (3.86% on senior debt; 10% on mezzanine debt)
    Term: Ten years
    Amortization: Ten years interest only
    LTV: 82%
    Prepayment: Defeasance
    Guaranty: Non-recourse
    Lender Fee: None

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    Acquisition Permanent Financing for a Multifamily Property, Sized to 75% LTV and a 1.15x DCR; West Adams, Los Angeles, CA

    December 11, 2019

    Transaction Description:

    George Smith Partners arranged permanent acquisition financing for a multifamily property in the West Adams submarket of Los Angeles, California. The 1960’s vintage property had significant deferred maintenance and below market rents, but the Sponsor required permanent financing from a portfolio lender in order to take advantage of today’s low interest rates. GSP sourced a regional bank that was willing to fund 75% of the purchase price with no holdback based on underwriting the in-place cash flow to a 1.15x DCR. The loan carried a five-year fixed rate of 4.00%, a ten-year term and an attractive 3-2-1 prepayment penalty. No deposits were required.

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    Term: 10-Year Term; 5-Year Fixed
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    DCR: 1.15x
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    Lender Fee: 0.25%

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    Cash-Out Refinance for 7-Unit Multifamily Property; North Hollywood, CA

    November 20, 2019

    Transaction Description:

    George Smith Partners successfully arranged a cash-out permanent refinance of a 7-unit multifamily property in North Hollywood, California. Loan proceeds were used to pay off the existing variable, higher interest rate loan and allow the Sponsor to obtain a lower interest, fixed rate loan. The equity also allowed the Sponsor to complete upgrades to the Property including roofing, flooring and various other deferred maintenance. GSP targeted a capital provider who is active in the multifamily segment and could maximize loan proceeds for the Sponsor in order to finish the Property upgrades.

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    Amortization: 30 Years
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    Lender Fee: None

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    Acquisition of an Apartment Building with One Master Lease in Place; San Diego, CA

    October 30, 2019

    Transaction Description:

    George Smith Partners arranged permanent financing for the acquisition of a master leased, multifamily property in San Diego, California. The complex is on a month-to-month master lease with a non-profit program that provides treatment and rehabilitation support to individuals and families facing substance abuse and behavioral health challenges. The Sponsor was in favor of this program and liked that it was promoting independent living and mental wellness. The Sponsor decided she wanted to keep the master lease in place instead of terminating it and turning the multifamily property into a traditional apartment building.

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    The Sponsor was in application with their relationship lender for over 6 weeks before finding out that they denied the loan. The Sponsor approached GSP immediately as their money had already gone hard and the Seller was growing impatient. In addition, the Seller had already identified the upleg of a 1031 Exchange and informed their agent to relist the Property and start fresh with a new buyer.

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    GSP worked quickly to source a lender that allowed the Sponsor to keep the month-to-month master lease in place. GSP collaborated with the listing agent and buyer’s agent on getting an extension that everyone felt comfortable with. GSP closed the loan within the submitted time constraints.

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    Term: 5 Years Fixed, 15 Year Term
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    Prepayment Penalty: 4,3,2,1
    Lender Points: None

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