Rate: 3.15% Fixed for 5 years
Term: 30 Years
Amortization: 30 Years
Prepayment Penalty: 3,2,1, open
Lender Fee: Par
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.
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.
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).
July 19, 2023
George Smith Partners closed a refinance loan on a 14-unit Los Angeles multifamily rental with a California-based credit union. The loan is fixed at 4.93% for 5 years, a rate that is at least 60 basis points lower than the rest of the market. The prepayment schedule is 5%, 4%, 3%, then open in the 4th year. This will give the borrower flexibility to refinance if interest rates decline. The loan did not require the borrower to maintain any deposits with the Lender.
April 19, 2023
George Smith Partners secured $14,100,000 in permanent financing for the acquisition of a 5,666 square-foot luxury, high-street retail property located at 909 N. Michigan Avenue, in the heart of Chicago’s Magnificent Mile Shopping District. The three luxury retail tenants include Bulgari, Omega Watches, and Chicago’s own Burdeen’s Jewelry. The Sponsor purchased the retail parcel from the owner of the Westin Michigan Avenue Chicago for $27,300,000, approximately $4,818 per square foot.
During the closing process, the capital markets experienced considerable volatility with the fallout from Silicon Valley Bank and First Republic Bank causing a seismic shift to the debt markets prior to funding of the loan. George Smith Partners was able to hold proceeds on the loan and closed the 5-year fixed rate note with full-term interest only by leveraging our lender relationships and augmenting with appropriate structure.
Rate: 6.75% Fixed (Index + 2.77%)
Term: 5 Years
Interest-Only: Full Term
Debt Yield: 15%
- Advisors: Robert Horton
February 1, 2023
George Smith Partners arranged $3,669,250 in fixed-rate financing to refinance a single-tenant NNN Rite-Aid located in Mechanicsburg, Pennsylvania. GSP sourced a lender that would provide 10-year, fixed-rate debt with no prepayment penalty in order to give the sponsor maximum flexibility. The financing is fixed at 4.98% amortizing over a 30-year period. Rite Aid signed a 26-year lease that expires at the end of the loan term. The tenant’s lease includes four 5-year options at fixed rents.
January 25, 2023
George Smith Partners secured a $14,430,000 permanent loan for an 85-unit, 208-bed, student housing property near the University of Memphis. The Sponsor was able to lock rate at application and secured the 5.41% fixed rate for seven years. In a rising rate environment, the ability to lock rate at application gave the Sponsor confidence in the terms of the loan and provided a clear path to closing. Prior to the refinance, the Property was encumbered by the construction loan having been recently completed in 2021. The Property was extremely successful in its first year of operations, having leased up to over 90% occupancy. During GSP’s marketing process, the property was significantly pre-leased for the upcoming school year providing lenders with the assurance of forward cash flows and clarity in their underwriting process. GSP contacted a variety of lenders including life insurance companies, CMBS lenders, and banks to provide the client with a wide variety of avenues to capture the most competitive lending terms in the current economic environment.
Rate: 5.41% (7-Year Treasury + 2.40%)
Term: 7 Years
Origination Fee: Par
Prepayment: Yield Maintenance Years 2-4, 2%, 1%, 0%
January 11, 2023
George Smith Partners arranged $3,800,000 in permanent financing for the refinance of a stabilized 39-unit multifamily property in Los Angeles, California. The Sponsor locked rate in early summer of 2022 during a time of rapidly increasing interest rates. Due to some unforeseen events, the transaction got delayed multiple times. GSP was able to get the rate lock extended multiple times due to our relationship with the Capital Provider. The rate lock was extended without a single increase to the rate or any additional fees. The loan includes a flexible prepayment penalty structure that allows the Sponsor plenty of options during the next 5 years as well as over $1,500,000 in cash-out proceeds.
Term: 5 Years Fixed
Amortization: 30 Years
Prepayment Penalty: 3/2/1, Then Open
Deposits Required: None
January 5, 2023
George Smith Partners arranged $3,830,000 in permanent financing on a newly stabilized 11-unit multifamily property located in Austin, TX. The loan is fixed at a rate of 6.00% for 10 years and a 3-3-3-2-1 prepayment structure. Although some lenders were hesitant to provide competitive permanent financing terms on a former condo multifamily property with less than a year of operating history, GSP was able to source competitive financing ahead of the rising interest rate environment with flexible prepayment. Thanks to our long-standing relationship with this repeat lending relationship, GSP was able to meet the Sponsor’s deadline and close this transaction within 43 days from signing the term sheet.
Term: 10 Years
Prepayment: 5, 4, 3, 2, 1%
- Advisors: Matthew Kirisits