Rate: Prime plus 125 bps. 5% floor.
Term: 2 years plus 2-year mini perm
Guaranty: Non-Recourse except for standard carve outs, “bad acts”, and environmental
George Smith Partners successfully placed a $12,130,000 ($247k/unit) construction loan to construct 49 townhomes for rent. The loan is floating rate at Prime plus 125 bps. with a floor at 5% and has a 2-year term with a 2-year mini perm extension. The Property will cater to higher income renters in the affluent Arcadia area of Phoenix, AZ. GSP leveraged its extensive expertise in the single-family rental sector to source options for the Sponsor who is a top tier private equity firm that has entered the build to rent space with several transactions.
The Project targeted a higher end renter (“renter by choice”) that wanted to live in an excellent neighborhood. Many other build to rent projects are targeted to a more affordable and “renter by necessity”. This higher end strategy was a bit more difficult to market, but the Project had strong sponsorship and the Lender had familiarity with the desirability of the specific neighborhood.
March 31, 2021
George Smith Partners successfully advised on $7,100,000 in joint venture equity financing for a 109-unit build-to-rent and Opportunity Zone transaction in Phoenix, AZ. This single family for rent community will offer one, two and three-bedroom detached homes with upscale furnishings and private yards for most units. This was the first transaction for our Sponsor who is optimistic about the popularity and emerging trend of the build-to-rent niche.