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
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.
Managing Director & President, AXCS Advisors
Managing Director & Chief Operating Officer, AXCS Capital
Senior Vice President
Director of Research & Marketing
August 23, 2022
George Smith Partners successfully arranged $3,100,000 for the cash-out refinance of a recently renovated 10-unit property in the Pacific Beach area of San Diego, CA. GSP was able to find a lender to quote the permanent loan despite the fact that the Property was not yet leased/stabilized. Furthermore, GSP was able to get the Lender to rate lock the low fixed rate for 90 days. The minimum cash required on the property is 10% and the minimum required occupancy at closing is 90%. The loan went under application on April 6, 2022, and closed within 90 days. The financing took longer than expected because of the Lender underwriting and a title issue at the last minute with a mechanics lien. However, due to GSP’s strong relationship with the Lender, we convinced them to honor and extend the rate lock.
Rate: 3.65% Fixed
Min DSCR: 1.25x
Term: 7 Years
Amortization: 30 Years
Prepayment: 5, 4, 3, 2, 1%
Lender Fee: 25bps
- Advisors: Alina Mardesich
August 10, 2022
George Smith Partners secured $6,850,000 for the refinance of a stabilized 58-unit Los Angeles apartment building. The loan is fixed at 4.15% for five years and has full-term interest-only payments. The Lender offered a 60-day rate lock, which provided a great benefit to the Borrower because interest rates increased while the loan was in application. A fast-paced closing process was required to keep the rate locked at 4.15%. GSP ensured that all stakeholders adhered to the timeline and that the loan successfully closed on the required date. There were no changes to the term sheet.
May 18, 2022
George Smith Partners arranged permanent financing for a 16-unit multifamily property located in Los Angeles, CA. The loan is fixed at a rate of 3.1% for 5 years and has 3 years of interest-only payments. The deal went into application several months ago when interest rates were 100 basis points lower. Because of GSP’s strong relationship with the Lender, the original terms were held in an increasing rate environment. The financing does not require any deposit relationship with the bank.
April 20, 2022
George Smith Partners secured a $2,083,000 agency loan for the cash-out refinance of a stabilized 44-unit multifamily property located in Dallas-Fort Worth, TX. GSP used its relationship with a capital provider whom we had closed multiple loans with. This lender recently closed a similar loan in this market. They understood the market and felt comfortable with the market characteristics. The Sponsor recently completed exterior and interior renovations including common area upgrades. The recent improvements allowed the Sponsor to increase rents thus increasing the value of the Property. GSP was able to provide the Sponsor with a 7-year term and a flexible prepayment structure equal to 5%, 5%, 4%, 4%, 3%, 2%, 1%. The loan structure allows the Sponsor to refinance out of an expensive loan with a fixed rate of 3.38%, while also receiving cash out. The Sponsor is using cash-out proceeds to continue their business plan of purchasing and renovating additional properties. Thanks to our long-standing relationship with this Lender, GSP was able to meet the Sponsors deadline and close this transaction within 60 days from signing the term sheet.
$15,100,000 Cash-Out Refinance of a 5-Property Multifamily Portfolio at 3.40% – 70% LTV; Los Angeles, CA
April 11, 2022
George Smith Partners arranged $15,100,000 in permanent financing for the refinance of a 5-property multifamily portfolio located in Los Angeles, CA. Using GSP’s vast network of relationships, we were able to source and quickly lock fixed rate financing in a market that is seeing rising interest rates. The Sponsor also wanted to pull cash out of their existing multifamily portfolio to use as equity towards purchasing new properties. The Sponsor had recently completed exterior and interior renovations including common area upgrades to all five properties. The recent improvements allowed the Sponsor to increase rents thus increasing the value of the Property. GSP was able to provide the Sponsor with a 30-year term, with the first 5 years being fixed at a rate of 3.40%. The loan represents 70% loan to value with a minimum 1.20 DSCR. The flexible stepdown prepayment structure is equal to 5,4,3,2,1. The cash-out loan allows the Sponsor to use more equity towards growing their multifamily portfolio. Thanks to GSP’s long-standing relationship with this bank lender, we were able to meet the Sponsors deadline and close this transaction within 35 days from signing the term sheet.
4,450,000 Cash Out Refinance Loan For 37-Unit Multifamily Property in Los Angeles, CA; 7 Years Fixed at 3.40%; 5 Years Interest Only Payments
April 6, 2022
George Smith Partners arranged $4,450,000 in financing for the refinance of a stabilized 37-unit mixed use property located in Los Angeles, California. The loan is fixed at a rate of 3.40% for 7 years. The new financing is a takeout of the acquisition loan that GSP closed five years earlier. Over the course of their ownership, the Sponsor performed a renovation of the Property and substantially increased the net operating income. As a result, the new loan provided a significant return of equity. The Lender held the rate of 3.40% even though interest rates increased while the loan was in application. Full credit was given for the income from two ground floor retail tenants. The loan has 5 years of interest-only payments.