Rate: Floating at 1 Month CME Term SOFR + 3.65% (dropping to 3.50% at stabilization)
Amortization: Interest Only
Minimum Interest: 6 months
George Smith Partners (GSP) secured $29,000,000 of bridge financing proceeds for a multifamily project in Bozeman, MT. The project is a newly constructed multifamily property totaling 95 units across 2 buildings and is currently in lease-up. At loan application, only 1 of 2 buildings had received their Certificate of Occupancy and was less than 10% leased. The project also included a small commercial space that was unleased at loan application.
Given GSP’s extensive experience in the Montana submarkets, coupled with the borrower’s track record, a total of 9 lender groups showed interest and participated in providing loan terms. GSP was able to overcome Bozeman’s small submarket challenges by identifying relevant comps and highlighting leasing velocity at the property. By the closing date, the property was over 35% leased.
The new bridge loan proceeds were used to repay the more expensive construction loan and provide sufficient reserves to carry the project through lease up and permanent refinancing. The loan request of $29,000,000 represents an as-is loan-to-value of 70%.
Senior Vice President
April 11, 2023
George Smith Partners successfully placed a $14,500,000 bridge loan for the lease-up of a newly constructed 54-unit apartment building in Los Angeles, California. The bridge loan refinanced the construction loan at maturity and provided time to stabilize the Property. GSP sourced a Lender that was able to provide cash neutral financing and fix the interest rate for the duration of the loan term. The financing is open for prepayment at any point throughout the loan term with a minimum of 12 months interest paid.
$102,000,000 Non-Recourse Bridge Financing for an Ultra-Luxury 37-Unit Multifamily Asset; West Hollywood, CA
March 30, 2022
George Smith Partners successfully arranged $102,000,000 (approx. $2.75M/unit) in non-recourse, bridge financing for a 37-unit, ultra-luxury apartment building located in the heart of West Hollywood. The fully condo-mapped project features hotel-level service and amenities including daily breakfast, airport drop-off, wellness classes, cooking classes, wine tastings, entertainment lounge, private dining room & kitchen, screening room, fitness center, yoga studio and a leather-paneled bowling alley. The asset boasts some of the highest rental rates on the West Coast.
Located in one of Los Angeles’ most coveted retail and residential neighborhoods, this trophy asset caters to wealthy residents seeking an amenity-rich community with minimal maintenance and maximal convenience. The best-in-class Sponsor recognized the investment potential of an ultra-luxury product in a prized location—the revered “pumpkin patch” site in West Hollywood. In working with potential lenders for this financing, GSP was able to identify a capital provider who not only understood the as-is value and in-place cash flow of the operating multifamily asset, but also the potential future value as 37 individual high-end condos. The loan closed in 50 days from application.
All Terms Confidential
$53,710,000 Non-Recourse Bridge Financing for a Six Property Portfolio Comprising Conventional Multifamily & Co-living Properties; Los Angeles, CA
March 16, 2022
George Smith Partners successfully arranged $53,710,000 in bridge financing for a six-property portfolio comprising three conventional multifamily properties and three co-living properties totaling 113 units (278 beds) in Los Angeles. All six of the properties are in various stages of lease-up. The non-recourse bridge financing refinanced existing construction debt from four unrelated lenders, provided a significant cash out to the Sponsor and allows more time for continued rent recovery in Los Angeles, in anticipation of permanent long-term financing.
The Properties are in highly dense submarkets with significant levels of rentership, with vacancies approaching 3%. The housing crisis in Los Angeles has yielded significant pent-up demand for attainable housing options. The best-in-class Sponsor recognized the substantial value of the high quality multifamily and co-living properties in strong growth submarkets where demand has consistently outweighed supply, especially for new product. GSP was able to identify a lender who was able to get comfortable with the business plan due the Sponsors familiarity with the markets and demonstrated success with both conventional and co-living properties.
Interest Rate: SOFR + 4.14% (SOFR floor of 0.10%)
November 3, 2021
George Smith Partners successfully brokered both the sale and acquisition financing for an extended stay hotel conversion located in the Mountain States region. The Seller, initially intending to undertake the Project, engaged GSP to source bridge financing for the 126-apartment conversion. Most of the conversion will be cosmetic changing the feel from hotel to residential. The hotel had been closed due to COVID, but the Sponsor needed to cancel the Management Agreement with the Operator and vacate the hotel. Because the hotel was in foreclosure, the Seller put the asset in bankruptcy before the trustee sale. This complicated the transaction and resulted in closing the deal two weeks from court approval.
GSP found a buyer with experience in hotel conversions who understood the Property’s value proposition and the bankruptcy process. With limited time, GSP represented the Sponsor in sourcing $10,000,000 of 3-month Gap financing for the purchase while concurrently working on inexpensive bridge financing. No appraisal was required for the Gap loan. This was an extremely complicated financing with exceptionally short time constraints. GSP was able to serve the needs of both Buyer and Seller and successfully secure financing.
Term: 3 Months
LTV: 68% Loan to Purchase Price
- Advisors: Robert Horton
$11,300,000 Acquisition Bridge Loan for 76-Unit Multifamily Property, 70% LTC, 6.5% Stabilized Debt Yield; Salt Lake City, UT
October 27, 2021
George Smith Partners secured $11,300,000 in proceeds for the acquisition of a 76-unit multifamily property in a tertiary market outside of Salt Lake City, UT. The bridge loan is structured as $10,795,000 at close and $505,000 in future funding. The fully funded proceeds represent 70% LTC. The loan floats at a rate of LIBOR + 3.15% with a 0.10% floor on LIBOR.
GSP encountered several challenges when discussing the deal with capital providers. Some lenders quoted a spread as high as 3.65% over LIBOR. Other lenders quoted proceeds less than $10,000,000 because they require a 7.5% exit debt yield. Some lenders considered the market to be too small.
GSP was able to source a lender that provided very competitive pricing, an exit debt yield of only 6.50%, and an easy close process. The loan closed in about 60 days without any changes to the signed term sheet.
October 6, 2021
George Smith Partners successfully arranged a $35,200,000 construction financing for the first phase of a hotel-to-multifamily repositioning and transformation in downtown Salt Lake City’s trendy Granary District. The financing capitalized renovation costs related to the adaptive reuse of the iconic property’s south tower with plans to transform it into a 184-micro unit multifamily asset with boutique-quality amenities. The Project’s north tower is planned to be renovated as part of a future phase.
Located on a coveted 5-acre site, the Project offers approximately 2.7 acres of excess development land, allowing for the future mixed-use infill opportunities onsite.
The Sponsorship team acquired the former hotel with visions of redevelopment in December 2019, creating a unique opportunity for a transformative mixed-use asset in Salt Lake City’s employment and social epicenter. GSP was able to identify a top-tier lender who not only understood the current demand for multifamily housing in Salt Lake City’s urban core, but also understood the significant value and future opportunity afforded by the excess developable land.
All Terms Confidential