$4,000,000 Ground-Up Construction Financing of a Nine-Unit For-Sale Condominium

Transaction Description: George Smith Partners successfully placed the financing to construct a nine-unit luxury condominium project in a very desirable Studio City, California location. The Sponsor purchased the land, currently improved with a single family residence, in 2011 and began the entitlement process. Sized to 75% of actual cost, the 12-month term is priced at 11.5% plus a three point lender origination fee.

Challenge: Despite the Sponsor being an experienced developer with years of experience, litigation following the housing crisis in 2008 placing significant strain on the ability to source construction capital for “For-Sale” units. A city provision in the entitlements offered a very tight time-frame when construction could begin.

Solution: Market research supported the Borrowers’ business plan and exit sale prices. A private non-institutional capital source was identified for a quick-close and certainty of execution as applied for.