$14,850,000 Non-Recourse 20-Year Fixed Rate Apartment Loans

2 – 12 – 14
Transaction Description: GSP successfully arranged four individual loans on four apartment properties in California and adjacent states with a 20-year fixed rate term and 30 year amortization. The Sponsor sought to take advantage of today’s low interest rates with assets he intends to hold for the long-term. GSP identified a life insurance company with very competitive long-term rates. While initially engaged to secure 10-year fixed-rate debt, GSP presented this 20-year option that better fit his business plan and aversion to future rate fluctuations and balloon risk. The assets are Class-B apartment rentals in secondary locations. The non-recourse rate is fixed at 5.25% for 20 years but amortized over 30 years.
Rate: 5.25%
Term: 20 Years
Amort: 30 Years
LTV: 45%
Advisors: Steve Bram, Allison Higgins

Related Financings

  • Expand

    Acquisition of an Apartment Building with One Master Lease in Place; San Diego, CA

    October 30, 2019

    Transaction Description:

    George Smith Partners arranged permanent financing for the acquisition of a master leased, multifamily property in San Diego, California. The complex is on a month-to-month master lease with a non-profit program that provides treatment and rehabilitation support to individuals and families facing substance abuse and behavioral health challenges. The Sponsor was in favor of this program and liked that it was promoting independent living and mental wellness. The Sponsor decided she wanted to keep the master lease in place instead of terminating it and turning the multifamily property into a traditional apartment building.


    The Sponsor was in application with their relationship lender for over 6 weeks before finding out that they denied the loan. The Sponsor approached GSP immediately as their money had already gone hard and the Seller was growing impatient. In addition, the Seller had already identified the upleg of a 1031 Exchange and informed their agent to relist the Property and start fresh with a new buyer.


    GSP worked quickly to source a lender that allowed the Sponsor to keep the month-to-month master lease in place. GSP collaborated with the listing agent and buyer’s agent on getting an extension that everyone felt comfortable with. GSP closed the loan within the submitted time constraints.

    Rate: 4.20%
    Term: 5 Years Fixed, 15 Year Term
    Amortization: 30 Years
    Prepayment Penalty: 4,3,2,1
    Lender Points: None

  • Expand

    $4,100,000 Non-Recourse Cash-Out Refinance, 14-Unit Multifamily Property; West Los Angeles, CA

    October 23, 2019

    Transaction Description:

    George Smith Partners successfully secured a $4,100,000 non-recourse permanent refinance of a 14-unit, multifamily property in West Los Angeles. Loan proceeds were used to pay off the existing variable, higher interest rate bridge loan into a lower interest, fixed rate loan. There was significant cash-out to the Sponsor, who had recently completed an extensive reposition and upgrade of the Property. Due to the Sponsor’s business plan, flexibility and interest only were paramount. As such, GSP worked with the Lender to structure a 5-year fixed rate term with 3 years interest only and a step-down prepayment structure of 3%, 2%, 1%. This structure allows the Sponsor to maximize current cash flow while providing the flexibility of a step-down structure that burns off when the loan begins to amortize.

    Rate: 4.20%
    Term: 30 years; 5 years fixed then converts to floating rate at Libor + 2.25%
    Amortization: 3 Years Interest Only then 30 year amortization
    LTV: 65%
    Minimum DSCR: 1.20x
    Guaranty: Non-Recourse
    Prepayment: Stepdown, 3%, 2%, 1%, open

  • Expand

    $7,800,000 in Permanent Financing for a 247-Unit Apartment Multifamily Project; Indianapolis, IN

    October 16, 2019

    Transaction Description:

    George Smith Partners secured $7,800,000 for the cash-out, refinance of a newly renovated, class B, 246-unit multifamily building located in Indianapolis. The structure allowed the Sponsor to pull out over $2,000,000 in cash and leave in place an affordable grant loan that was awarded to the Property for maintaining a certain number of affordable units.

    The Sponsor is a regional multifamily owner who has a strong relationship with an international bank. The in-place loan was originated by the Sponsor’s relationship bank. There were only three months of results after renovations. Due to the lack of results, the current Lender’s proposed offer to refinance the Property did not give the Sponsor credit for the upgrades and increased rents. It also would have required the payoff of an attractive loan from the City.

    GSP identified a national balance sheet lender that understood the strength of the asset, improvements and experience of the Sponsor. Using our vast experience in understanding this type of asset and proving out the large future increases in cash flow, GSP was able to secure financing that was far superior and allowed for cash-out to the Sponsor. The financing also allowed for the affordable grant loan to remain in place. GSP was able to negotiate no lender fees or prepayment. The loan GSP secured allowed for higher proceeds, cash out, longer term, and an overall lower cost.

    Rate: 4.40%
    Term: 7 Years Fixed / 30 year Term
    Amortization: 30 Years
    LTV: 75.0%
    Guaranty: Recourse
    Prepayment: None
    Lender Origination: None

  • Expand

    Low Debt Yield, 3.77% Coupon Permanent Financing for the Acquisition of a Recently Developed Grocery-Anchored Retail Center; FL

    September 25, 2019

    George Smith Partners successfully placed $14,690,000 in non-recourse, ten-year fixed rate first mortgage debt for the acquisition of an approximately 54,000 square foot, 96% occupied, recently developed retail center in Western Florida. An investment-grade grocery anchor on a newly signed long-term lease comprises approximately 75% of the collateral. The anchor has no sales history at the Property and is not required to report sales going forward. GSP sourced a lender to provide full term non-recourse Interest-Only financing subject to a low 7.35% debt yield. The 65% leverage loan has a 3.77% fixed coupon over the ten-year term.

    Rate: 3.77%, Fixed
    Term: 10 years
    Amortization: Full Term Interest-Only
    Loan to Value: 65%
    Prepayment: Defeasance
    Lender Fee: None

  • Expand

    75% Leverage, 3.75% Coupon Non-Recourse Permanent Financing for a Neighborhood Retail Center; Western United States

    September 18, 2019

    Transaction Description:

    George Smith Partners successfully placed a $5,740,000 non-recourse, ten-year fixed rate loan on an 89% leased, multi-tenant retail property, shadow-anchored by Savers and Big Lots. GSP worked with the Sponsor to overcome several environmental issues with the Property. GSP sourced a lender able to achieve 75% leverage, non-recourse financing and structure around the environmental issues. The loan was sized to the greater of an 9.75% debt yield or 1.40x debt service coverage ratio on the 3.75% fixed rate coupon.

    Rate: 3.75%, Fixed
    Term: 10 years
    Amortization: 30 Year Amortization
    Loan to Value: 75%
    Prepayment: Defeasance
    Lender Fee: None

  • Expand

    $3,744,000 of Acquisition Financing for 3 Single Tenant Starbucks’ across Middle America

    July 24, 2019

    Transaction Description:

    George Smith Partners secured $3,744,000 of permanent financing for the acquisition of 3 single-tenant Starbucks. The drive-thru locations all have new leases with at least 8 years of term left and tenant options to extend. Each property is located in a different state across the middle of the country (Texas, Louisiana, Illinois). The Sponsor wanted to have a single capital source finance all three properties for ease of closing and ongoing servicing. GSP was able to find a lender that could accommodate the variety of locations and provide the same terms for each acquisition. All of the loans are fixed at 4.75% for 5 years and have a 30-year amortization schedule. Loan amounts were sized to a 1.25x DSCR, which resulted in an average LTV of 62%. The recourse financings do not have any prepayment penalties and can be refinanced at any time.

    Rate: Fixed at 4.75% for 5 Years
    Term: 10 Years
    Amortization: 30 years
    Prepay: None
    LTV: 62%
    DCR: 1.25
    Guaranty: Recourse

Don't Miss a Fact,
Sign Up for FINfacts!

FINfacts is a weekly newsletter highlighting recent financings and economic insights.

Subscribe Here