$4,000,000 Cash-Out Equity Capitalization Bridge Loan; Beverly Hills, CA

Rate: 8.0%
Term: 1 Year
LTC: 90%
Amortization: Interest Only
Guaranty: Non-Recourse
Prepayment: None

Transaction Description:

George Smith Partners arranged cash-out financing for developers of a high-end luxury home in Beverly Hills to pull out trapped equity and prepare for a future construction loan. The long-term goal was to obtain highly leveraged, non-recourse construction financing that will utilize the equity from this transaction. The first step was to capitalize the Property. The Property had a $4,400,000 as-is value and a $19,000,000 as-completed value. GSP obtained a $4,000,000, 90% LTC that will provide the ownership with equity capital.

In today’s market, it is challenging to find capital providers willing to provide high leveraged, cash-out financing for land. Using our relationships, GSP was able to identify a non-recourse lender who would provide highly leveraged, cash-out financing to 90% LTC. By completing the first stage of financing the ownership will have the needed capital for a larger future construction loan.

Advisors

Related Financings

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    $40,000,000 Non-Recourse, Cash-Out Bridge Financing for a 180-Key Radisson RED Hotel; Portland, OR

    April 1, 2020

    Transaction Description:

    George Smith Partners arranged $40,000,000 in non-recourse, cash-out bridge financing for a 180-key Radisson RED hotel in Portland, Oregon. The bridge facility allowed the Sponsor to pay off its construction loan, return capital to investors and provided additional runway for the hotel to ramp-up. The hotel occupies the first nine floors of a 19-story, Class-A, mixed-use high-rise tower that was delivered in Q4 2018. The remaining 10 floors are Class-A office space leased out at some of the highest rental rates in the Portland MSA.

    GSP was able to leverage market interest to secure the most competitive terms available by focusing attention on the strong sponsorship and its long history of development and investment in the local Portland market. The location of the Property is adjacent to Portland State University and walking distance to the heart of Downtown Portland. The Property offers uniqueness of a select service hotel in a Class-A high-rise. The selected Capital Provider was able to recognize the Property’s intrinsic value and execute in a timely manner. The 75% LTV, non-recourse execution was fixed at a 7.75% interest rate and included a sizable cash-out. The Sponsor concurrently sold the office portion to a core, trophy office buyer through a separate sale.

    Rate: Fixed at 7.75%
    Term: 3 + 1 + 1
    Amortization: Interest Only
    LTV: 75%
    Guaranty: Non-Recourse

  • Expand

    $13,155,000 Non-Recourse Cash-Out Refinancing of a Retail Shopping Center; Orange County, CA

    October 23, 2019

    Transaction Description:
    George Smith Partners successfully arranged $13,155,000 in non-recourse bridge financing for a 20,000 sf shopping center in Orange County, CA. The Sponsor has invested over $10,000,000 in renovating the Property and it now it is currently 91% occupied.

    Challenge:
    The Subject Shopping Center has undergone significant reposition in tenant makeup and revenue. As of the date of funding the Center was 91% leased, but several of the tenants were in the process of building out their TIs and had not moved into the Property. Banks, insurance companies, CMBS lenders and credit unions requested more seasoning from our Sponsor. Debt funds and hard money lenders did not want to provide enough proceeds. The financing was too early for a perm lender who would want to see the seasoned cash-flow, and too late for most bridge lenders who would want to fund the actual construction and renovation without releasing cash out to the Sponsor.

    Solution:
    The Sponsor had many goals which included the reposition of the center, the sale of the center, and financing that allowed the Sponsor to pull cash out to sustain him during the sale process allowing him to receive back some of the value added to the Property. GSP was able to provide a solution for the Sponsor with a Midwest-based debt fund that allowed cash out for working capital of over $3,000,000 in less than 15 days. With GSP’s help, the Lender understood the ultimate value of the Property, was able to get comfortable with the large cash-out and give the Sponsor what they needed to complete the final stages of their plan and sell the Property.

    Rate: 8.9% fixed
    Term: 2 Years
    Amortization: Interest Only
    LTV: 80% / LTC: 90%
    Prepayment: None – 6 month minimum
    Guaranty: Non-Recourse

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