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$25,818,000 Bridge Loan Refinance of Vacant 51-Unit Multifamily Property; 85% LTV;5.2% Stabilized Debt Yield; Los Angeles, CA

Rate: Floating at LIBOR+6.00% with floor of 6.65%
Term: 12 months + one 12-month extension
LTV: 85%
Debt Yield: 5.2%
Guaranty: Non-Recourse at Certificate of Occupancy

Transaction Description:

George Smith Partners secured $25,818,000 in proceeds for the cash-neutral bridge loan refinance of a 51-unit multifamily property in Los Angeles. The Lender provided proceeds of 85% of appraised value and underwrote to a 5.2% stabilized debt yield. The new loan refinances both the construction loan and the preferred equity that were part of the original financing. The loan is floating at LIBOR + 6.00% with a 6.65% floor.

At the time of financing the Property was 95% complete but still short of a temporary certificate of occupancy. In addition, the leverage on the loan precluded several lending sources from achieving the necessary proceeds. The Sponsor desired to completely pay off the original construction financing, which was originated at 85% loan to cost. Only a few lenders could get the requested leverage and the market quoted pricing in the high single digits. Lastly, Koreatown experienced Covid related collection issues which affected the rental underwriting. GSP provided rental and sales comps that proved out the strength of the market. As a result, the selected Lender became comfortable with the location and the Sponsor’s ability to lease up the new Property.


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