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$27,180,000 Construction Financing to 74% LTC for a 168-Unit Workforce Housing Project; Saint Louis, MO

Rate: 4.65%
Term: 48 months
Fee: 1.00%
Amortization: 30-months interest only; 30-year amortization during months 31-39; 27.5-year amortization thereafter
LTC: 74%
Prepayment: None; open in whole or in part at any time
Guaranty: Full repayment guarantee that burns down to a 50% repayment guarantee upon certificate of occupancy

Transaction Description:

George Smith Partners successfully placed $27,180,000 (74% LTC) in construction financing to fund the ground-up development of a first-of-its-kind in the market, multi-property, 168-unit workforce housing project in an infill and trendy neighborhood of Saint Louis, Missouri. GSP leveraged its diverse lender relationships to source a construction loan for the unique project that is comprised of six individual buildings ranging from 18-unit (for rent) townhomes to 35-unit apartment buildings. Compounding the Project’s complexity is the requirement to cap rents, for a period of 10 years, on 51% of the units to be affordable for 80% AMI and the remaining 49% of units to be affordable for 100% AMI. Furthermore, although all six buildings are located within a one-block radius of each other, none of the sites are contiguous. The GSP-sourced loan was tailored to meet the needs of both the Sponsor and its equity partner. The equity partner capped construction leverage to 67.5% LTC, however GSP structured the loan to include a $2,500,000 earnout, which is sized to 74% LTC. GSP and the Sponsor were ultimately successful in obtaining approval from the equity partner for the higher-leverage earnout which is released upon 90% occupancy and a 1.25x DSCR on T-3 income.

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