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$35,000,000 Cash-Out Refinance of Newly Built 161-Unit Multifamily Property; Boise, ID

Rate: 4.40% Fixed for 7 Years
Interest Only: 3 Years
Term: 7 Years with Optional 7 Year Extension
Amortization: 3 Years Interest Only followed by 27 Year Amortization
Prepayment Penalty: No Prepay
LTV: 60%
DCR: 1.20x

Transaction Description:

George Smith Partners secured $35,000,000 in proceeds for the permanent refinance of a newly built 161-unit multifamily property in downtown Boise, ID. The Property has been achieving strong leasing velocity but was only 30% occupied when GSP began discussing the transaction with capital sources. Although the original loan request was structured with a forward rate lock and a future funding holdback, GSP was able to source a lender that funded the full proceeds at close.

Some notable challenges were encountered when marketing the deal. Most perm lenders declined to bid because the Property was still in lease-up. Several other lenders would not loan in Boise, although there has been an uptick in institutional capital shifting their focus to Boise. Additional quotes were in the range of $30,000,000-$32,000,000 with a holdback, which was short of the Borrower’s desired leverage.

GSP was able to source a lender that provided superior proceeds, rate, and structure. The Lender held the rate of 4.40% despite large fluctuations in rates while the loan was in application, with no rate lock deposit. The loan has no prepay, which will allow the Borrower to refinance as rents continue to season. The fully funded proceeds provided a considerable amount of cash out to the Borrower over their initial construction loan.

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