Rate: 2.92% Fixed
Term: 10 Years
Amortization: 10 Years Interest Only
LTV: 56%
DSCR: 1.35x
Recourse: Non-Recourse
Prepayment: Yield Maintenance
Loan Fee: Par
Transaction Description:
George Smith Partners secured $12,933,000 in proceeds for a recently stabilized 21-unit multifamily building located in the Pico Robertson neighborhood of Los Angeles, CA. The non-recourse, par, permanent Fannie Mae loan was utilized to refinance the existing bank construction debt in the amount of ~$9.45M and return equity to the ownership. The loan represented 88% of cost and carries a 10-year term with 10-years of interest only payments. The loan is secured by a Class A five-story mid-rise multifamily building comprised of four 2-bedroom units and seventeen 3-bedroom units. Amenities at the Subject Property include controlled access entry and parking, an elevator, rooftop deck, and private balconies. The loan was placed into application prior to major Covid-19 concerns thus no index floor was contemplated. GSP worked with the Lender to underwrite revenue to a trailing one month of actual collections carefully navigating the waiver process so as not to trigger new business which would have resulted in an index significantly wider than the actual 10-year Treasury rate. Lastly, a six-month reserve for principal, interest, taxes, insurance, and reserves was held back at closing in the event of a shortfall, enabling the Lender to fund during the global pandemic. The reserve will be released within one year if the Subject Property maintains the minimum 1.35x DSCR for the same period.
Advisors
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Jonathan Lee
Managing Director & President, AXCS Advisors
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Shahin Yazdi
Managing Director & Chief Operating Officer, AXCS Capital
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Matthew Kirisits
Vice President
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Kyle Redmond
Vice President
Related Financings
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Perm Debt – 10-Years Interest Only – Stabilized Multifamily; Los Angeles, CA
March 24, 2021
Transaction Description:
George Smith Partners secured senior permanent financing for a stabilized multifamily property in Los Angeles, CA. The non-recourse debt totaling $12,300,000 was utilized to refinance existing debt and return equity to the Ownership. The loan was structured with a 10-year term and interest only payments for the full duration. The loan was collateralized by a Class-A 34-Unit multifamily building, the Subject was 94% leased at closing and located in a highly desirable West Los Angeles neighborhood.
GSP selected a lender that was able to refinance the Sponsor’s existing debt, cover prepayment penalties and return a significant amount of equity to the Borrower, while simultaneously locking in interest only payments for the next ten years at a very desirable rate. GSP worked with the Lender to minimize debt service reserves while addressing Lender concerns for potential COVID related shortfalls; cash-out proceeds were secured on the loan despite several COVID related delinquencies.
Rate: 3.43%
Term: 10 years
Max LTV: 65%
Min DCR: 1.35x
Amortization: None; 10-Years Interest Only
Origination Fee: Par
Prepayment: Yield Maintenance- Advisors: Jonathan Lee Shahin Yazdi Matthew Kirisits Kyle Redmond
