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$15,800,000 Cash-Out Permanent Financing for a 47-Unit Multifamily Property, Fixed at 3.01% for 10 Years; Torrance, CA

Rate: 3.01%
Term: 10 Years
LTV: 65%
Amortization: Seven Years Interest Only; 30-Year Amort Thereafter
Guaranty: Non-Recourse

Transaction Description:

George Smith Partners arranged $15,800,000 in permanent financing secured by a 47-unit garden-style, multifamily property located in Torrance, CA. The non-recourse loan carries a 3.01% fixed rate for 10 years with 7-years of interest only payments. The recapitalization provided significant cash-out to the Sponsor and reduced their previous interest rate considerably.

The Property had recently undergone an extensive renovation program and had limited seasoning on the new, higher rental rates achieved on the repositioned units. The Property did however, maintain stable occupancy and collections throughout 2020 despite COVID-19 regulations in California allowing tenants to defer rent payments.

Amidst a time of market volatility and economic uncertainty, GSP was able to leverage market interest to secure the most competitive terms available by focusing on the desirable location as well as the Sponsor’s track record and familiarity with the asset.

Related Financings

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    Transaction Description:

    George Smith Partners successfully arranged $102,000,000 (approx. $2.75M/unit) in non-recourse, bridge financing for a 37-unit, ultra-luxury apartment building located in the heart of West Hollywood. The fully condo-mapped project features hotel-level service and amenities including daily breakfast, airport drop-off, wellness classes, cooking classes, wine tastings, entertainment lounge, private dining room & kitchen, screening room, fitness center, yoga studio and a leather-paneled bowling alley. The asset boasts some of the highest rental rates on the West Coast.

    Located in one of Los Angeles’ most coveted retail and residential neighborhoods, this trophy asset caters to wealthy residents seeking an amenity-rich community with minimal maintenance and maximal convenience. The best-in-class Sponsor recognized the investment potential of an ultra-luxury product in a prized location—the revered “pumpkin patch” site in West Hollywood. In working with potential lenders for this financing, GSP was able to identify a capital provider who not only understood the as-is value and in-place cash flow of the operating multifamily asset, but also the potential future value as 37 individual high-end condos. The loan closed in 50 days from application.

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  • $53,710,000 Non-Recourse Bridge Financing for a Six Property Portfolio Comprising Conventional Multifamily & Co-living Properties; Los Angeles, CA

    March 16, 2022

    Transaction Description:

    George Smith Partners successfully arranged $53,710,000 in bridge financing for a six-property portfolio comprising three conventional multifamily properties and three co-living properties totaling 113 units (278 beds) in Los Angeles. All six of the properties are in various stages of lease-up. The non-recourse bridge financing refinanced existing construction debt from four unrelated lenders, provided a significant cash out to the Sponsor and allows more time for continued rent recovery in Los Angeles, in anticipation of permanent long-term financing.
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    Interest Rate: SOFR + 4.14% (SOFR floor of 0.10%)
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  • $3,925,000 Non-Recourse 21-Unit Multifamily Acquisition Financing; Los Angeles, CA

    January 18, 2022

    Transaction Description:

    George Smith Partners sourced a $3,925,000 loan for the acquisition of a 21-unit property in West Los Angeles. The loan provided 65% leverage and is fixed at a rate of 3.15% for 3 years. The Lender gave the Borrower full credit for newly signed leases and was able to underwrite to the most recent month’s income. Net operating income was underwritten at the actual note rate, which resulted in higher proceeds compared to other lenders. The Property had some deferred maintenance, but the Lender was willing to have the Borrowers complete it after closing. The 3-year declining prepay fit with the Borrower’s value-add business plan.

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  • $129,000,000 Construction Financing for a Multifamily Asset; Downtown Los Angeles, CA

    January 18, 2022

    Transaction Description:

    George Smith Partners secured $129,000,000 in construction financing for a 280-unit mixed-use multifamily development featuring 25,000 SF of ground-floor retail/office space and best-in-class amenities. Located in the heart of the Cornfield-Arroyo Seco Specific Plan (CASP) area, the Property is adjacent to the high-traffic Los Angeles State Historic Park, USC+LAC Medical Center; the Project site is within a 5-minute walk from more than 34 upcoming bars, restaurants (Momofuku by David Chang), cafes and entertainment venues. The financing provided funding for future capital expenditures and related construction costs.

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  • $6,225,000 Construction-to-Perm Multifamily Financing; Los Angeles, CA

    January 12, 2022

    Transaction Description:

    George Smith Partners successfully placed construction-to-perm financing of $6,250,000 for the development of a 19-unit multifamily community in West Los Angeles, CA. The 4-story building will provide 1, 2 and 3-bedroom units in a supply-constrained submarket. The recourse loan provides for two-years of interest-only financing with a 6-month extension that converts to a perm loan with a combined term of 10 years. The starting rate is fixed for 7 years then amortizing. The loan represents 60% of stabilized value and 70% of cost and allows for open prepayment based on a prepayment fee of 2%,2%,1%,1% in years 1 to 4. The Project will be Type-V construction consisting of 4-stories, a rear 750 SF community courtyard, partial ground level and partial subterranean parking. Unit mix includes studio, one and two-bedroom units including two low-income units. All units include covered patios however non-studio units include larger than average outdoor living terraces that range from 130 to 193 SF. Community amenities include a rear courtyard with firepit lounge and BBQ grill. The units average 654 SF in size. The Project represents the Client’s second multifamily construction project. GSP was able to assist in bringing in a qualified general contractor and get the Lender comfortable with the Borrower’s ability to execute despite their limited development track record.

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  • $5,512,000 Construction Financing for 25-Unit Multifamily Development; Los Angeles, CA

    December 8, 2021

    Transaction Description:

    George Smith Partners secured $5,512,000 of senior construction financing for the development of a 6-story, 25-unit ground-up multifamily building. The Transit Oriented Development (TOD) multifamily Project is within three blocks of the Wilshire/Western Metro station situated in the Koreatown neighborhood of Los Angeles.

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