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$25,000,000 Joint Venture Equity Financing

Term: Terms are confidential

Transaction Description: George Smith Partners successfully arraigned the Joint Venture equity financing for a sponsorship group involved in various development strategies. One targeted project is the coastal infill development of luxury single family residences in affluent sea-side neighborhoods.

Challenge: This type of capital placement is difficult to structure due to the disparate nature and location of all the assets being developed. These transactions are sponsorship driven where the importance of articulating the strengths of the sponsorship group to capital is paramount.

Solution: Utilizing GSP’s program to introduce sponsorship group’s to institutional sources of capital for various strategies successfully led to the close of this financing. While various other opportunities had been presented over the years, the benefits of gaining a knowledge foothold of the Sponsor’s infrastructure and platform helped achieve the successful and eventual closing with this particular strategy.

Related Financings

  • $21,600,000 Construction Financing and $10,700,000 JV Equity for 142-Unit BTR Community; Savannah, GA

    July 13, 2022

    Transaction Description:

    George Smith Partners successfully advised on $21,600,000 in construction financing and $10,700,000 in JV Equity for the development of a 142-unit built-to-rent community in Savannah, GA. The Project features 142 detached single-family homes on a 66.15-acre site. The homes will feature three to four bedrooms with an average square footage of 1,500 across four distinct home styles.

    GSP worked through several strategies with the Sponsor to source the 65% LTC, non-recourse construction debt financing, and a 90% joint-venture equity partner for the ground-up, build-to-rent community. With our marketing efforts highlighting the strength of the Savannah rental market, this project received interest from several groups for both debt and equity.

    The Sponsor projects vertical development to be completed by the end of this year and lease-up to be finalized by Q1 2025.

    Rate: WSJ Prime + 50 with a 4.00% Floor
    Term: 3 Years
    Amortization: Interest Only
    LTC: 65%
    Fee: 1.00%
    Guaranty: Non-Recourse

  • $39,000,000 Construction Debt and Advised on $20,000,000 LP Equity for Seven-Story, 137-Unit Mixed-Use Development; Midtown Sacramento, CA

    November 23, 2021

    Transaction Description:

    George Smith Partners successfully placed $39,000,000 in construction debt and advised on $20,000,000 Limited Partner equity for the ground up construction of 137-unit mixed-use development with ground floor retail in Midtown Sacramento, CA. The Project is the second asset that GSP has structured both debt and equity for a sequence of planned multifamily developments. Pricing for the non-recourse construction loan tightened from the first transaction six months ago.

    The site will be developed into a seven-story building consisting of six levels of rental units, parking, and ground floor retail. Situated in Midtown, Sacramento’s trendiest neighborhood, the Property is walking distance to restaurants, shops and is conveniently positioned near the rail station and a local highway. The area has increasingly attracted significant public and private investment due to its proximity to employment hubs and lifestyle amenities.

    The capital markets were weary of ongoing supply chain and increasing construction costs. GSP worked with the Lender and equity investor to structure contingency levels that were acceptable to both. The Sponsor was provided with competitive, non-recourse construction loan and an investor that could grow with their future development needs.

    Rate: Daily Simple SOFR + 270 (2.79%)
    Guaranty: Non-recourse
    Amortization: Interest Only
    LTV: 65%

  • $10,000,000 JV Equity for Workforce Housing; Tertiary Mountain States

    June 23, 2021

    Transaction Description:

    George Smith Partners successfully placed $10,000,000 of joint venture equity for the construction of a 134-unit workforce housing development in a tertiary Mountain State market. There is considerable demand due to the quality of life and a D1-university in close proximity. GSP structured a 90/10 co-invest with an out of state developer with a robust pipeline.

    Though guided to an expeditious close, the equity raise faced a few challenges. GSP brought the deal to market early in COVID when the economic ramifications of stay-at-home policies were uncertain. Additionally, the Project’s location in a tertiary market with only 50,000 people led to multiple groups being hesitant to deploy capital. However, the effects from COVID and the state’s pro-business economic policies eventually were shown to be a positive factor in multifamily demand.

    All Terms Confidential

  • $7,100,000 JV Equity Financing for 109-Unit SFR Construction in an Opportunity Zone; Phoenix, AZ

    March 31, 2021

    Transaction Description:

    George Smith Partners successfully advised on $7,100,000 in joint venture equity financing for a 109-unit build-to-rent and Opportunity Zone transaction in Phoenix, AZ. This single family for rent community will offer one, two and three-bedroom detached homes with upscale furnishings and private yards for most units. This was the first transaction for our Sponsor who is optimistic about the popularity and emerging trend of the build-to-rent niche.

    All Terms Confidential

  • $51,750,000 Senior Construction Financing & $16,200,000 Mezzanine Debt Placement for the Development of a Grocery Anchored Shopping Center; Kona, Hawaii

    January 15, 2020

    Transaction Description:

    George Smith Partners advised on the placement of $51,750,000 and $16,200,000 Senior Debt and Mezzanine debt respectively for the ground-up development of an institutional quality 204,275 SF outdoor shopping center that will be located along Kuakini Highway, one of the island’s most trafficked thoroughfares. The Property, which sits on a rare fee-simple 20-acre site, will provide patrons with easy access to both Henry Street and Palani Road and over 700 parking spaces (representing a parking ratio of 4:1,000 SF).

    Challenges:

    Although the Sponsors who partnered with a major life company, had extensive prior career experience in the field of commercial real estate development, the Project represented the Sponsor’s largest development to date. The development of the Project had already commenced adding another layer of complexity to the transaction.

    Solutions:

    GSP focused on the lack of new retail development on Kona and specifically the anchor tenant’s commitment to relocate their store from an adjacent shopping center (less than 0.50 miles). In addition, GSP was able to convey to capital sources the immense value of the fee simple ownership of the site – a rare occurrence in Hawaii where most land is leased from the State. Ultimately GSP was able to identify two lenders who not only understood the value of the fee simple ownership of the site but also understood the lack of new retail space and the subsequent demand.

    All Terms Confidential

  • $12,000,000 in Joint Venture Equity and $23,900,000 in Non-Recourse Construction Financing for a 185 –Single Family Build-To-Rent Community; Western U.S. Secondary Market

    November 27, 2019

    Transaction Description:

    George Smith Partners successfully advised on $12,000,000 in joint venture equity financing and $23,900,000 in non-recourse senior construction financing for the ground-up development of a 185- home build-to-rent community. Single-family-for-rent communities are a newer asset class and this project was among the first in the market. These communities offer the experience of living in a single-family home with the ease and cost of living in an apartment building. The Sponsor expects the project to be well received as there are distinct competitive advantages over the existing apartment product in the market place for several reasons including the new construction, low density and both interior and exterior privacy.

    Rate: LIBOR+5.00%
    Term: 3+1+1
    Leverage: 64% LTC
    Guaranty: Non-Recourse