$31,500,000 Construction Financing to 72.5% LTC for a 240-Unit Workforce Housing Project; Sheboygan, WI

Rate: 5.00%
Term: 48 months
Amortization: 32-months interest only; 27.5-year amortization thereafter
LTC: 72.5%
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 $31,500,000 (72.5% LTC; 70%LTV) in construction financing to fund the ground-up development of a 240-unit, workforce housing project in an infill neighborhood of tertiary market, Sheboygan, Wisconsin. GSP leveraged its diverse lender relationships to source a construction loan for this large project located in a small market during the peak of the COVID-19 pandemic. GSP was able to focus lenders on sponsorship quality and how the project was tailored to take advantage of Sheboygan’s strong market fundamentals. This includes an insatiable demand for workforce housing driven by numerous manufacturers being in the county including Kohler, Sargento, and Johnsonville among others. A Tax increment financing (TIF) district was created to offset a portion of the Project’s costs, which added another layer of complexity as GSP was directed to source a lender that would also underwrite the projected TIF cashflows to increase the construction loan leverage.

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