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$33,000,000 Nine-Building/Nine-Loan Multifamily Apartment Portfolio Cash-Out Refinance

Rate: 3.15% Fixed for 5 years
Term: 30 Years
Amortization: 30 Years
LTV: 75%
DCR: 1.20
Prepayment Penalty: 3,2,1, open
Recourse
Lender Fee: Par

Transaction Description:
George Smith Partners placed $33,000,000 in permanent financing for a nine-property multifamily apartment portfolio in Los Angeles for a local owner/developer. The portfolio was split between two capital providers into nine separate uncrossed loans that closed concurrently. Sized to 75% of appraised value and a 1.20 DCR, the loans all self-liquidate over 30 years. Fixed for five years at 3.15%, rates will reset and float at 235 over LIBOR for the remaining 25 year term. A step-down prepayment is underwritten and opens without penalty after the third year.

Challenge:
With unrelated open acquisition escrows pending, our Sponsor required an aggressive portfolio capital provider who would maximize a return on equity while demonstrating the ability to close quickly and as applied for. Market interest rate volatility added concerns as loan proceeds were limited by cash flow.

Solution:
George Smith Partners sourced two unrelated portfolio lenders that underwrote for a net $5,000,000 in return of equity. Post BREXIT vote, GSP advised the Sponsor to early rate lock to mitigate market risk exposure from additional volatility. Our capital providers funded all nine transactions within Sponsor’s requested time frame at an historically low coupon. (Rates bumped up one week after locking, but prior to loans funding).

Advisors

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