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$13,500,000 Cash-Out Refinance of 132-Unit SRO Property; Los Angeles, CA

Rate: 3.875 % fixed for 7 years
Term: 7 Years
Min. DCSR: 1.25x
LTV: 75%
Prepayment: No prepayment penalty

Transaction Description:

George Smith Partners successfully placed $13,500,000 in cash-out permanent financing for a 132-unit single room occupancy (SRO) located just outside of Downtown Los Angeles. SROs are like apartment buildings expect some of the units have shared bathrooms, similar to a dorm. The Sponsor approached GSP to help assist with the refinance of the Property to take out their expensive lender, while receiving cash out.

Since the Property is unique, it was important that GSP identified a lender who understood SRO properties, while delivering competitive terms. At the time of the refinance, the Sponsor had just completed exterior and interior renovations, including common area upgrades. Utilizing its extensive relationships, GSP was able to provide the Sponsor with a 7-year term, with all 7 years being fixed at a low rate of 3.875%. The first 24 months are interest-only, before converting to 30-year amortization thereafter. There is additional flexibility within the loan structure because there is no prepayment penalty. With over $2 Million in cash out, the Sponsor still lowered their monthly debt service. The cash-out loan allows the Sponsor to continue to grow their multifamily portfolio. Thanks to GSP’s long-standing relationship with this Lender, we were able to meet the Sponsors deadline and close this transaction within 45 days.

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