March 2017
Transaction Description: George Smith Partners secured a $2,250,000 bridge loan for the 70% completed spec luxury waterfront single family residence in Naples, Florida. The sponsors self-funded the development and sought to use the proceeds to recapitalize for other projects.
Challenge: The Sponsor requested maximum cash-out proceeds that dissuaded many capital providers from considering the request given the luxury home’s vulnerability in a market downturn and overall development risk. Most lenders were not comfortable going over 60% loan to cost.
Solution: GSP identified a private capital source who was comfortable with the incomplete project and understood the upside potential at completion. Our Sponsor’s considerable development track record and financial strength further encouraged the capital provider not to shy away from the high dollars per square foot. Sized to 75% of total cost and 53% of as-complete value, the 12-month loan is interest only with no prepayment penalty or yield maintenance.
- Rate: 11%
- LTC: 70%
- Term: 12 Months + Two 3 Month Extension
- Amortization: Interest Only
- Recourse
- Prepayment Penalty: None
