Rate: Floating rate (SOFR-based) with rate stepdown at TCO
Term: 36 Months + Two, 12-month Extensions
Stabilized Loan-To-Value: 70%
George Smith Partners placed a $47,000,000 senior construction loan for the ground-up development of a mixed-use project in Azusa, CA. When complete, the 5-story project will consist of 127 apartment units and approximately 10,000 SF of 1st-floor commercial/retail/restaurant space. The Project is an integral component in the ongoing expansion of the City of Azusa’s Downtown district and is immediately adjacent to the Gold Line Station, which runs from Azusa Pacific University & Citrus College west to Downtown Los Angeles. This is the Sponsor’s second project in Azusa.
A lack of comparable projects within the submarket posed a challenge. GSP emphasized the supporting employment centers inside a ten-mile radius, including the two colleges and eighteen medical facilities. In addition, a detailed breakdown of the San Gabriel Valley (SGV) submarket helped showcase the presence of a proportionally higher share of younger households than statewide. Data depicting home values that had grown out of reach for those living in a three-mile radius helped the case for a rental project. Further support was provided by the SGV submarket experiencing minor economic impact during the last two years and during Covid.
GSP executed a full-time marketing campaign and identified the most economically beneficial capital stack scenario for the sponsorship with a stepdown in rate at Temporary Certificate of Occupancy (TCO).
Managing Director & President, AXCS Advisors
Managing Director & Chief Operating Officer, AXCS Capital
Senior Vice President
Director of Research & Marketing
$25,200,000 Construction Financing for a Mixed-Use, Luxury Multifamily Development; Downtown Culver City, Los Angeles
February 16, 2022
George Smith Partners successfully arranged $25,200,000 in senior construction financing for a 54-unit ground-up luxury apartment community featuring 3,000 SF of ground floor retail space in the heart of Downtown Culver City. The Sponsorship Team acquired the Property in 2018, which is now fully entitled and ready to break ground. The Project is expected to deliver in Q4 of 2023.
As a central and upcoming submarket of Los Angeles, Culver City is peppered with tech startups and major employers from Amazon to Apple, flourishing as an employment hub with over 250,000 high-paying jobs and approximately 8,000 employees within a mile from the Subject site. The best-in-class Sponsorship team has extensive local industry knowledge and recognized the Property’s underlying value, bolstered by the submarket’s immense growth and capital inflow, as well as the area’s historical roots in the movie and entertainment industry. GSP was able to identify a lender who offered highly competitive terms, given the Project’s significant demand and the value of multifamily housing in an ultra-high growth submarket.
All Terms Confidential
January 18, 2022
George Smith Partners secured $129,000,000 in construction financing for a 280-unit mixed-use multifamily development featuring 25,000 SF of ground-floor retail/office space and best-in-class amenities. Located in the heart of the Cornfield-Arroyo Seco Specific Plan (CASP) area, the Property is adjacent to the high-traffic Los Angeles State Historic Park, USC+LAC Medical Center; the Project site is within a 5-minute walk from more than 34 upcoming bars, restaurants (Momofuku by David Chang), cafes and entertainment venues. The financing provided funding for future capital expenditures and related construction costs.
The top-tier Sponsorship group focused on minimizing their equity contribution through a high leverage debt facility to execute their business plan. GSP was able to identify non-recourse capital with strong local knowledge and confidence in the long-term fundamentals of the high-growth submarket. These efforts were aided by the site’s development potential, given the prime location and thousands of surrounding demand drivers.
All Terms Confidential
January 5, 2022
George Smith Partners successfully secured $26,200,000 in construction financing for a 138-unit mixed-use multifamily development located in the heart of downtown Salt Lake City, UT. Located on a coveted 0.73-acre site in a designated Opportunity Zone, just steps from the Utah Jazz’s Vivint Arena, the Project features ground-floor retail and best-in-class amenities and outdoor terraces, with an anticipated groundbreaking slated for the first quarter of 2022.
The greater Salt Lake City submarket is one of the fastest growing, most financially fit metros in the country, bolstered by substantial job growth and diversification. The Project will provide much-needed high-quality multifamily units to a market in need of significant new supply. In addition, the well-appointed units and boutique amenities are poised to be well received in the downtown urban core. The experienced Sponsorship team has an established local presence in Salt Lake City, recognizing the unique opportunity to create a transformative mixed-use apartment complex in the City’s social and employment hub. GSP was able to identify a top tier national bank who understood the growing demand for multifamily housing in an ultra-high-growth submarket.
All Terms Confidential
$58,000,000 Life Co. & Preferred Equity Non-Recourse Construction Financing; Culver City Adjacent, CA
April 28, 2021
George Smith Partners successfully closed $58,000,000 in non-recourse construction financing for a seven-story, mixed use development across from Sony Pictures Studios and adjacent to Culver City, CA. The Project features 139 apartment units over 1,969 SF of ground floor retail. The Sponsor received a density bonus thanks to TOC incentives, in exchange for allocating 14 affordable units.
While this is the second U.S. project – the first was also financed by GSP – for a successful international developer, the pool of capital providers was significantly reduced due to the borrowing entity being headquartered in a foreign country. Presenting this deal during the height of the COVID-19 pandemic also presented significant challenges. GSP leveraged its structured financing expertise, lender relationships, strength of the Project and the Culver City market to negotiate the most desirable terms for the Sponsor.
The financings are comprised of $42,000,000 in senior construction debt from a Life Co. lender and $16,000,000 in preferred equity and includes a substantial amount in recap funds to the Sponsor at closing. The term is five years, with interest only payments and no prepayment penalty upon Certificate of Occupancy. The senior note is LIBOR + 390 and the preferred equity investment’s interest will be fully accrued during the entire term, thereby reducing the amount of interest reserve and the Sponsor’s initial cash equity contribution.
Rate: L + 390 (senior)
Term: 5 Years
Amortization: Interest Only
Prepayment: None upon Certificate of Occupancy
Guaranty: Non-Recourse; Completion Guarantee with Standard Carveouts to an Entity
- Advisors: John Choi