Rate: 7.97%% Fixed
Term: 1 Years
Amortization: Interest Only
Extensions: One 6-Month Option
Loan Fee: 1%
George Smith Partners secured a $4,250,000 bridge loan for a new 13-unit multifamily community located in the Larchmont Village area of Los Angeles, CA. The non-recourse loan will be utilized to refinance the Project’s construction debt and complete the Property to get to Certificate of Occupancy. The loan represents 65% loan to stabilized value and is structured with a 1-year initial term with interest only payments. The loan allows for open prepayment and carries one 6-month extension option.
The loan is secured by a recently constructed mixed-use development comprised of 13 studio, one and two-bedroom units. The Project offers several unique features including several 2-story loft/townhome style apartments, an expansive roof top lounge with views, partial subterranean parking garage with a semi-automated parking system and EV charging stations.
GSP was able to secure a lender that underwrote to the stabilized NOI, closed with no debt service reserve, no recourse, and no prepayment fee. The selected lender could move quickly, did not require an appraisal, and funded within three weeks after issuing an application.
$46,800,000 Construction Financing for the Development of a 247-Unit Build-to-Rent Community; Foley, AL
November 21, 2022
George Smith Partners is pleased to announce the successful arrangement of a $46,800,000 construction loan for the development of a 247-unit build-to-rent community in Foley, Alabama. Through GSP’s strong relationship with the bank, GSP was able to successfully negotiate a 65% LTC, Non-recourse loan to fund parri-passu with the JV’s equity at WSJ Prime + 1.25% through construction. Pricing reduces and leverage increases to 70% LTC upon preset leasing hurdles.
November 16, 2022
George Smith Partners successfully placed two simultaneous loans to acquire a five-building office campus in Laguna Hills, California. The 84% occupied Property sits on a 16-acre site adjacent to a reservoir and contains ample parking (4:1000 square feet). The Properties were built in the late 1980s and completely renovated in 2016-2018. GSP structured the financings to fit the Sponsor’s business plan which involved separating the collateral into a two-building bridge loan and a three-building CMBS loan. These loans allow the Sponsor to place long-term, fixed-rate debt on the stable assets while keeping shorter-term debt on the more transitional buildings.
Loan 1 (3 Buildings): $24,800,000 of non-recourse, seven-year fixed rate first mortgage CMBS debt for the acquisition of three of the office buildings (total 158,000 square feet) which are 84% leased. GSP sourced a lender able to provide seven-year, non-recourse financing and the ability to close with a complicated DST (Delaware Statutory Trust) equity structure in a tight timeframe. The loan was sized to a 9.00% debt yield, 59% LTV, or 1.60x debt service coverage ratio on the 5.93% fixed rate coupon. The Sponsor bought down the interest rate.
Loan 2 (2 buildings) $14,600,000 of non-recourse, 75% LTV, bridge financing for the acquisition of the remaining two office buildings (total 66,000 square feet), which are 79% leased with upcoming tenant rollover. GSP identified a Lender that could provide 75% leverage and a flexible 24-month loan term with three 12-month extensions. The loan is priced at 5.95% + 1 Month Term SOFR and is non-recourse. GSP was able to identify a lending source that not only understood the market and demand for office space in the market.
Unique Structure – Two Simultaneous Loan Closings on the Divided Collateral
Loan Amount: $24,800,000
Term: 7 Years
Amortization: Full-Term Interest Only
Debt Yield: 9.0%
Loan Amount: $14,600,000
Term: 24 Months, plus Three 12-month Extension Options
Amortization: Interest Only
Prepayment: 12 Months Minimum Interest
$13,990,000 Construction Revolver Financing for 23 For-Sale, Detached Single Family Residences; Prescott, AZ
November 9, 2022
George Smith Partners successfully arranged $13,990,000 in acquisition and construction revolver financing for a 23-lot, for-sale, detached single-family residential community in Prescott, AZ. The Project is located in a gated community within the 1,100-acre Prescott Lakes master-planned community. The City of Prescott, known for its seasonal climate, quality of life, and low property taxes has experienced tremendous population growth. The Sponsor, a repeat client, recognized the opportunity to develop much-needed housing for the area. Despite the increasingly challenging market, GSP leveraged its expertise and relationships to identify a construction lender that had a deep understanding of the submarket, understood the projected sales prices (appraisal requirement waived), and recognized the Sponsor’s ability to execute on their plan. GSP was able to negotiate a high-leverage, fixed-rate loan and worked efficiently with the Lender throughout the one-month closing process.
Rate: 9.25% Fixed
Term: 18 Months, with Two 3-Month Extension Options
Amortization: Interest Only
LTC: 82% (combined on land & construction)
Guaranty: Non-Recourse, with Completion Guaranty
Prepayment: 9 Months Minimum Interest
November 2, 2022
George Smith Partners successfully advised on the refinance of two parcels containing a vacant commercial retail building and 90% leased mixed-use residential/retail building in Los Angeles, CA. The senior loan proceeds totaled $9,800,000 of non-recourse financing, approximately 58% LTV. After the COVID-19 pandemic largely stopped retail leasing, the Sponsor responded to changing market dynamics by altering business plans to re-entitle the vacant retail parcel to multifamily. Negotiating an LOI for the sale of the mixed-use residential building, the Sponsor required a bridge loan to pay off the existing bridge debt and carry both parcels until the completion of entitlements and eventual sale.
GSP had to strategically market the opportunity given a weak, Covid-related retail leasing market and relatively complicated business plan. With deliberate advising of GSP, the Sponsor was able to achieve fixed, non-recourse financing despite a fully vacant building.
Term: 12 Months
Rate: 7.75% Fixed
October 26, 2022
George Smith Partners arranged $2,250,000 in permanent financing for the acquisition of a stabilized 12-unit multifamily property in Los Angeles, California. The Sponsor acquired the Property as interest rates were soaring and as the environment was changing drastically with the Fed raising rates. GSP identified a Capital Provider who allowed an early rate lock, required no holdbacks of any kind, no deposits to be held at their branch, and provided an extremely flexible prepayment penalty structure. This allows the Sponsor plenty of options during the next 5 years at an aggressive rate.
Term: 5 Years Fixed
Amortization: 30 Years
Prepayment Penalty: None
Reserve Account: None
Deposits Required: None
- Advisors: Reuven Risch
October 26, 2022
George Smith Partners successfully placed a $16,900,000 cash-out CMBS loan to fund the refinancing of a limited-service hotel located in Central California. Backed by strong travel demand, the hotel was performing better than ever with additional revenue growth expected in future months. The Property was encumbered by a bridge loan nearing the end of its term and the Sponsor was looking to maximize proceeds to secure a cash-out refinance.
CMBS lender appetite toward hotels has picked up since the pandemic and the hotel received multiple bids from lenders. The 10-year fixed rate loan represents a 65% loan to the appraised value. Most CMBS lenders underwrote the loan to a 12% debt yield but due to the successful advising process of George Smith Partners, the chosen Lender was able to close using a 10.75% debt yield on T-12 income. Having experienced a dip in revenue through the COVID-19 pandemic, underwriting this asset required additional diligence to truly understand the stabilized cash flow. The hotel was experiencing a ramp-up in demand as drive-to markets have been extremely well-traveled since the pandemic. GSP and the Sponsor timed the refinance so that the hotel generated strong cash flow and secured an attractive rate during a rising rate environment.