$12,477,000 Multifamily Acquisition and Bridge Loan at a 5.15% Debt Yield

Transaction Description: George Smith Partners secured the $12,477,000 acquisition and reposition loan for a 189-unit apartment building in Southern California. The mixed use asset also contains 1,700 square feet of ground floor retail. A 1920s vintage construction, an ornate lobby and large central courtyard accented the 5 story reinforced brick building. Positioned in a current low income neighborhood, this asset is adjacent to gentrified communities with very expensive rents. Our sponsor will commence on a capital improvement project to improve the unit/property quality and lease units to tenants at rents significantly lower than neighboring areas, but higher than current levels. Sized to a 5.15% going-in debt yield, GSP identified a capital provider who underwrote to future income and offered limited top-end recourse based on the property’s value and cash flow post renovations. The two year acquisition and bridge loan allows for a five year extension that becomes non-recourse beyond carve-outs upon execution. There is no interest reserve requirement during the reposition period and there is no prepayment penalty. Renovation proceeds are deposited into a checking account that is completely controlled by the Sponsor; there are no draw requests.