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$39,300,000 Forward Rate Lock Permanent Financing of a 154-Unit Luxury Multifamily Property in Ventura, CA

Rate: 1.47% spread over 10 YT
Term: 192 months (16 Years)
Amortization: 2 Years Interest Only; 30-Year Amortization Thereafter
LTV: 60%
Guarantee: Non-Recourse
Prepayment Penalty: Yield Maintenance

Transaction Description:
George Smith Partners successfully arranged the permanent financing for a newly constructed luxury 154-unit apartment complex located in Downtown Ventura, one mile from the Pacific Ocean. The Sponsor sought a permanent loan to refinance the construction loan. The Sponsor’s goal was to lock in a long-term, low interest rate in a rising interest rate environment prior to the building reaching stabilized occupancy.

Challenges:
There was significant lease up risk for the permanent lender, as the Property had not yet stabilized with less than a month of operating history at the time of loan underwriting.

Solution:
GSP was able to make the Lender comfortable by highlighting the Sponsor’s successful track record, the Property’s strong position in the market with few comparables available, the Property’s excellent location, and the prospects for strong rent growth. GSP secured an early rate lock at a low 1.47% spread over the 10 Year Treasury for a 16 year fixed rate loan term. Sized to 60% of value, the non-recourse financing includes 2 years of interest only payments, which enhances the cash flow during the early years of the loan. The loan closed in 30 days.

Advisors

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