$13,898,000 for Two Multifamily Properties; Southern California

Amounts: $6,125,000 & $7,773,000
Rate: 3.33%
Term: 10 Years, Fixed, 5-Years Interest Only
Recourse: Non-Recourse
LTV: 70%

Transaction Description:
George Smith Partners successfully arranged two, 10-Year, fixed rate loans for a total of $13,898,000 on two Southern California multifamily properties.
The first loan was for $6,125,000 and was used to refinance an 18-unit multifamily property built in 1986, located in Hollywood, CA. The second loan was for $7,773,000 and was used to refinance a 26-unit multifamily property built in 1991, located in Culver City, CA.
Both properties had undergone significant renovations and upgrades within the past four years. Despite COVID-19 regulations allowing tenants to suspend rent payments, both properties have stayed fully leased throughout 2020, with all tenants continuing to pay rent
Although the properties had been previously financed with floating rate debt after undergoing their renovation programs several years ago, GSP demonstrated to the Sponsor that despite the requirement to pay a prepayment penalty on their existing financing, this refinancing would:
1) Reduce the current interest rate by approximately 135 bps
2) Increase the cash flow
3) Eliminate floating rate risk
4) Provide significant net cash-out proceeds
5) The prepayment expense is offset by the interest savings within approximately 18 months.
Both loans are fixed at 3.33% and are interest only for the first five years. The loans are not cross-collateralized, are non-recourse and sized at 70% of appraised value.


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