$12,933,000 Permanent Loan to Refinance Existing Construction Debt for a Recently Completed 21-Unit Multifamily Property; 65% LTV; 2.92% Fixed, 1.35 DSCR; Los Angeles, CA

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.

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