George Smith Partners arranged a $42,000,000 senior construction loan for the ground-up development of a 252-unit mixed-use luxury apartment community in the Marmalade District of Downtown Salt Lake City, Utah. The mixed-use project will include ground floor retail and features Class A apartments with modern design.
GSP was able to identify several competitive lenders that recognized the Sponsor’s ability to execute large-scale multifamily projects, based on the successful delivery of a similar project they built in the MSA. GSP was able to leverage various lenders in order to help procure the most competitive terms available with a three-year term and two, one-year extension options.
Senior Vice President
Senior Vice President
Senior Vice President
$39,000,000 Construction Debt and Advised on $20,000,000 LP Equity for Seven-Story, 137-Unit Mixed-Use Development; Midtown Sacramento, CA
November 23, 2021
George Smith Partners successfully placed $39,000,000 in construction debt and advised on $20,000,000 Limited Partner equity for the ground up construction of 137-unit mixed-use development with ground floor retail in Midtown Sacramento, CA. The Project is the second asset that GSP has structured both debt and equity for a sequence of planned multifamily developments. Pricing for the non-recourse construction loan tightened from the first transaction six months ago.
The site will be developed into a seven-story building consisting of six levels of rental units, parking, and ground floor retail. Situated in Midtown, Sacramento’s trendiest neighborhood, the Property is walking distance to restaurants, shops and is conveniently positioned near the rail station and a local highway. The area has increasingly attracted significant public and private investment due to its proximity to employment hubs and lifestyle amenities.
The capital markets were weary of ongoing supply chain and increasing construction costs. GSP worked with the Lender and equity investor to structure contingency levels that were acceptable to both. The Sponsor was provided with competitive, non-recourse construction loan and an investor that could grow with their future development needs.
October 20, 2021
George Smith Partners successfully placed financing for phase 1 of a 400-unit multifamily development located in Bozeman, MT. The Project will be a significant upgrade to other assets in the market, offering an in-complex coffee shop, yoga studio, clubhouse, and multi-acre park. Unlike the competition, many units will have direct access to garage parking.
The garden style project is located within an Opportunity Zone, which drew attention from national equity groups eager to deploy capital. GSP, a leader in Op Zone Capital advisory, brought several equity partners to the table who understood the value add to the market.
Phase 1, consisting of 268 units, is set to be complete by late 2023. Phase 2, consisting of 132 units, will commence construction in 2023, with the entire project stabilizing in 2024. This market has seen a price increase of over 200% in housing since 2016. It continues to grow at a double-digit rate largely due to remote work, the expansion of the Big Sky and Yellowstone resort destinations, and Kevin Costner being amazing.
$105,000,000 Construction Loan and $17,120,000 Limited Partner Equity for the Development of a For-Sale Residential Project; Hayward, CA
September 29, 2021
George Smith Partners placed a $105,000,000 non-recourse construction loan and $17,120,000 of Limited Partner Equity for a for-sale residential project in Hayward, California. The Project will be built in phases and have 123 townhomes and 66 condominiums providing much needed workforce housing to the area. The Project will also have some affordable units for sale.
Two GSP teams were able to combine efforts and executed an effective and in-depth marketing campaign to help the capital markets understand the opportunity appropriately while finding solutions to various challenges that arose during the entire process. GSP marketed and highlighted the Project’s strength, the phasing nature of the build schedule, the projected sales prices and the forecasted upward trajectory in both sales price growth and sales pace growth. GSP was able to source capital providers on the Project that were comfortable with both the depth and experience of the Sponsor as well as their belief in the continued growth of the Bay Area.
Ultimately, the professionalism and expertise of the two GSP teams on the deal coupled with the proficiency and extensive experience of the Sponsor allowed for a successful close.
$37,500,000 Non-Recourse, Stretch Senior Construction Loan for a Mixed-Use OpZone Development; Western States
September 22, 2021
George Smith Partners placed a $37,500,000 non-recourse, stretch senior construction loan for a 7-story ground-up development of a mixed-use OpZone Project. When complete, the Project will consist of 151 apartment units (including 14 Live/Work Lofts), approximately 15,000 sf of restaurant space, 10,000 sf of retail, and 12,000 sf of office space. The average apartment size is 730 sf, and most units will have private balconies with unobstructed views of the desert and city.
As the Project is a first of its kind in the surrounding area, finding appropriate comparable projects that would speak to the strength of this market proved to be a challenge. GSP focused on the Project as a marquee development and detailed the new employment opportunities from Google, and a hospital expansion, sports training facility, along with the emerging renaissance happening within the downtown area. GSP was able to demonstrate the immense intrinsic value from the ongoing renovation of the City Hall Plaza and Events Center — a 500-seat canopied amphitheater and 60,000 sf of programmable deck area for hosting community events — that sits directly across from the Project. GSP also worked through the Sponsor’s GMP budget with the Lender during a period of escalating cost, showcasing the strength of the Sponsor group in their local market. In turn, this created a comfort level needed by the Lender with regards to the commercial space of the Project.
GSP executed a broad and in-depth marketing campaign to help capital markets understand the opportunity appropriately. These efforts resulted in a successful close with proceeds achieving the Sponsorship’s objective.
$33,000,000 Stretch – Senior Non-Recourse Construction Loan for Ground-Up Luxury Condominiums; Los Altos, CA
September 15, 2021
George Smith Partners successfully advised on $33,000,000 in construction financing for a 27- unit luxury condominium project to be built in downtown Los Altos, CA. This high-end offering is the first larger scale project for the newly formed, but individually experienced sponsorship group. The Sponsor has significant historical ground-up experience and will self-perform as the General Contractor. GSP worked through several strategies with the Sponsor including preferred equity, mezzanine debt and an all in one, stretch-senior execution. Ultimately, GSP successfully obtained several highly reliable options for each strategy and the Sponsor selected an integrated full-service construction lender. GSP negotiated a land value contribution in excess of cost and as a result, the land lift allowed the Sponsor to invest less up-front equity than otherwise required to close the transaction.
The Sponsor projects completion of the project in late 2023. Due to the supply constrained market for the condo units, they expect the project to be completely sold out shortly thereafter.
$20,530,000 Non-Recourse Construction Financing for a 25-Unit Luxury Beachfront Condominium, For-Sale Development; Cocoa Beach, FL
September 8, 2021
George Smith Partners successfully arranged $20,530,000 in non-recourse senior construction financing for The Surf, a beachfront condominium project in Cocoa Beach, FL. The Project consists of 25 luxury residential units with sale prices ranging from $975,000 to $2,500,000, as well as 3 ground floor retail units. The Project is currently 75% pre-sold. Per Florida statutes, any buyer deposit amount over 10% of the purchase price may be used towards development costs, but a large portion of those deposits are not due from buyers until building top off. GSP was able to successfully secure a lender comfortable with crediting future deposits to decrease the Sponsor’s up-front equity requirement.
The Sponsor’s co-developer and GC tragically passed in early 2020, leading them to engage a new group. While the new GC had extensive experience in luxury housing development, they are relatively new to ground-up, multi-level condominium development. GSP leveraged its extensive lender network, strong pre-sales, and the Orlando-based Sponsor’s strong development track record in this submarket and product type to provide non-recourse construction financing.
The term is 24 months with interest-only payments and 6 months minimum interest. The senior note was sized to 64% LTC. GSP structured the loan, crediting future sales deposits towards the total equity requirement, thereby eliminating any additional out-of-pocket equity required at closing above the land acquisition and predevelopment costs already spent to date.
Rate: WSJ Prime +4.50%
Term: 24 Months + Two 2-Month Extensions
Loan to Cost: 64%
Prepayment: 6 Months Minimum Interest
Lender Fee: 1% In, 1% Out
- Advisors: Gilda Rivera