Rate: Blended to 4.95%, Floating
Term: 18 Months
Amortization: Full-Term Interest Only
LTV: 80%
Lender Fee: 1% in / 1% out
Prepayment: Six Months Minimum Interest
Guaranty: Non-recourse
Transaction Description:
George Smith Partners successfully placed $21,000,000 in bridge financing for a 111-unit apartment community in St. Louis, Missouri that retired a high-leverage construction loan, funded a lease-up and operating reserve, converted from a recourse to non-recourse structure, materially lowered the Borrower’s cost of capital, and provided enough proceeds at close (100% of loan proceeds were released upon loan closing) to cash out 105% of the Borrower’s cost basis, although the Property was less than 10% occupied. The eighteen-month loan term provides the Borrower with time to stabilize and season the asset prior to either selling or refinancing it with long-term permanent debt in today’s low interest rate environment. GSP leveraged its expertise of the St. Louis market, long-standing lender relationships, and capital markets creativity to achieve the Borrower’s goals, which was primarily the maximum return of capital.
Related Financings
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$15,500,000 Non-Recourse Bridge Financing for a Mid-Construction 3-Property Multifamily Portfolio; Los Angeles, CA
December 16, 2020
Transaction Description:
George Smith Partners secured a $15,500,000 bridge loan for three newly constructed, pre-Certificate of Occupancy multifamily assets located in Los Angeles, CA. The non-recourse loan provided significant cash-out proceeds to the sponsor, refinanced outstanding construction debt and capitalized construction completion costs. The loan is sized at 70% LTC on a 4.90% fixed rate, non-recourse, 12-month term. The loan did not require an interest reserve or capitalized carrying costs.
The loan is secured by three new construction multifamily assets in the Koreatown and Eagle Rock submarkets of Los Angeles, totaling 57 units, in various stages of completion. All will be complete by Q1 2021, with lease up occurring throughout the balance of 2021. Given COVID related delays and slower-than-anticipated leasing velocity, GSP was able to identify a lender comfortable with the high quality, new construction product, and the long-term stability of these submarkets. The loan closed three weeks from term sheet execution.
Rate: 4.90% Fixed
Term: 12 Month
Amortization: Interest Only
LTC: 70%
Guaranty: Non-Recourse
Lender Fees: 1.00%
Prepayment: Open -
$4,700,000 Non-Recourse, Bridge Financing for Mid-Construction Apartment Project; Pico-Robertson Area of Los Angeles, CA
November 18, 2020
Transaction Description:
George Smith Partners arranged $4,700,000 in non-recourse, bridge financing for an 85% complete, 13-unit apartment project in the Pico-Robertson area of Los Angeles, CA. Despite marketing this deal as a construction take-out loan for an 85% complete project during the global pandemic, GSP successfully engaged a debt fund to take out the existing construction loan with additional funds to complete construction. The non-recourse bridge facility was priced at an interest-only rate of 5.90% with a 12-month term plus a 12-month extension option. Thanks to GSP’s long-standing relationship with this debt fund, we were able to close this transaction in just 8 business days.
Rate: 5.90% Interest Only
Term: 1 + 1
LTC: 80%
Guaranty: Non-Recourse
