$22,800,000 JV Opportunity Zone Equity Financing for the Development of a Lifestyle Hotel in Scottsdale, AZ

Transaction Description:

George Smith Partners successfully closed a refinance of a single-tenant industrial building in Downtown Los Angeles with a life insurance company. Given the strong market and property type, GSP arranged very attractive financing that required no on-going reserves of any kind. This was important as the Sponsor did not want the lender to reserve for the lease roll which occurs the same year as the loan maturity. The lender also locked their interest rate at application signing which saved the Sponsor over 65 basis points as rates climbed significantly during processing and closing of the loan.

Transaction Description:

George Smith Partners has successfully facilitated a recent cash-out refinance of $4,000,000 for our Sponsor’s multifamily portfolio. This financial arrangement was designed to suit two distinct multifamily properties nestled within the city of Charleston, South Carolina.

The team collaborated with a local bank that demonstrated a keen understanding of these multifamily properties. The negotiations resulted in an arrangement where the lending institution allowed 70% of the appraised value of the Properties for a cash-out refinance. This mutually beneficial agreement showcased the confidence both parties had in the assets’ value and future prospects. The Lender showcased their capacity to offer flexible fixed-rate financing, granting the choice to adjust the fixed rate to market conditions in favor of the borrower throughout the loan’s duration without incurring any expenses.

The Sponsor, represented by the GSP team, was relatively new to the Charleston market and operated from a non-local base, which presented a significant hurdle in the current real estate landscape. The properties were purchased outright with cash in late 2022 and mid-2023.

Transaction Description:

George Smith Partners successfully secured a $4,835,000, 72% LTC, fixed, non-recourse, pre-development bridge loan for a 205-unit multifamily ground-up construction project in Denver, Colorado. The bridge loan will be used to complete all the architecture/engineering milestones required to obtain permits and finalize pre-development work prior to breaking ground in Q3 of 2024.

The Denver metropolitan area is expected to add roughly 216,700 new residents over the next five years, fueled by the expansions of the Denver International Airport and Fitzsimons Medical Campus. The Project is expected to fulfill an underserved workforce demographic by offering an affordable yet high-quality option. The Project will feature a rooftop deck with BBQ grills, outdoor games, picnic areas, a dog run, gym, state-of-the-art security systems, bike parking, package storage, and a mail center with full-time onsite management and maintenance.

Transaction Description:

George Smith Partners secured a $4,760,000 acquisition loan for a vacant 12,300 square foot retail property in Los Angeles, CA. The Lender provided proceeds of 70% of the acquisition price at a rate of 7.325%, fixed for the first three years. The loan was closed with a regional bank.

The Property was delivered as a vacant shell. The buyer intends to lease it to restaurant and retail tenants. Given the current market volatility, most of the other quotes were from private money lenders at much higher rates. To support the purchase price and future valuation, an extensive set of sales and lease comps were provided to the lender and the appraiser. The Borrower’s track record of success with similar properties demonstrated their ability to execute their business plan.

Transaction Description:

George Smith Partners successfully arranged $42,200,000 in financing to recapitalize the construction of a 133-key extended-stay hotel on Music Row in Nashville, TN. The Lender disbursed 71% LTC, accompanied by a 12-Month interest reserve.

Multiple challenges were encountered when discussing the transaction with capital providers. The first being that the hotel is unflagged- many hospitality lenders focus primarily on popular hotelier affiliations during this risk-constrained lending environment. The team encountered a second hurdle related to mid-construction refinancing, which presented a challenging proposition from the outset of our campaign due to the hotel’s planned grand opening before November of 2023.

The GSP team was determined to leverage the deal with support from the local Nashville sponsor that owns and manages over 600 keys in the Nashville market and over 2,000 keys in the southeast, property location on Music Row in Nashville, and construction completion.

GSP successfully identified a hospitality Lender that exhibited confidence in the construction recapitalization process. This Lender was equipped to furnish the necessary funds to facilitate a smooth transition into TCO. Additionally, displaying confidence in the projected Average Daily Rate (ADR) assumptions. Notably, the Lender displayed comfort in financing the unflagged and extended-stay hotel, due to the Sponsor’s reputable track record in the market.