Rate: 30 Day Term SOFR + 4.50%
Term: 24 Months, with two 1 Year Options
Amortization: Interest Only
LTC: 73%/ 80% Loan to Purchase Price
Guaranty: Non-Recourse
Prepayment Penalty: 12 Month
Transaction Description:
George Smith Partners secured $50,250,000 for an acquisition bridge loan for a two property multifamily portfolio in Houston, Texas. To meet the seller’s 38-day closing requirement, GSP used experience and relationships to quickly identify and close this financing within the required timeline. GSP was able to execute the Sponsor’s business plan and secure a high leveraged bridge loan at 30-day Term SOFR + 4.50%. The loan was cross collateralized with both properties, which totaled 736 Units. The Properties were operating at a going-in 5% debt yield when we closed. This interest-only loan included 100% of the capital needed for rehab.
Challenge: There were multiple challenges regarding timing, leverage, crime, and property specific issues. In addition, the overall bridge debt and CLO markets have had major disruption. GSP aided a local family office, an international fund, and a strong local operating partner who teamed up to purchase this asset as part of a 1031 exchange that GSP financed 16 months prior. In addition, several lenders were over allocated in the Houston market and could not handle the size of this portfolio.
Solution: GSP focused on the top lenders that we had closed within the past because of importance of closing with the 1031 exchange. Due to our great relationships, GSP was able to quickly pick the best lender and expedite the application process. GSP assisted the Sponsorship team in developing a strong business plan. This included proving the benefits of the multiple sponsorship structure, as well as getting the Lender comfortable with the local partners to operate the properties. GSP understood the dynamics of each sponsorship team and helped the Lender upstand the strategy of operating the Properties as one asset. GSP knew by bundling the two properties together and creating a larger transaction that it would be more appealing to lenders. This would enable lenders to increase proceeds and decrease pricing as compared to financing two separate smaller transactions. GSP ultimately utilized one of our relationship lenders who was willing to invest the upfront time and place aggressive bridge financing, with appealing leverage, proceeds, and terms of 2 years interest-only.
Related Financings
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Construction Loan for the Redevelopment of an 8-Unit/26 Bedroom Student Housing Community in Los Angeles, California
April 11, 2024
Transaction Description:
George Smith Partners has sourced a construction loan for the redevelopment/repositioning of a proposed 8-unit/26-bedroom student housing community in Los Angeles just two blocks away from the University of Southern California.
The Sponsor is one of the premier private student housing operators in the market with a track record of delivering best-in-class off-campus housing. The Sponsor’s portfolio includes 60 buildings/600+ bedrooms located within the Project’s competitive neighborhood. Despite fluctuations in the capital markets, GSP secured attractive financing for the Sponsor to commence and execute their business plan.
Proceeds: $5.65M
Rate: Prime +1%
Term: 18 months + one six-month extension
Origination Fee: 2.5%
Guaranty: Non-Recourse
- Advisors: Evan Kinne Ed Steffelin Nick Shapiro
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Acquisition Bridge Loan for a Newly Constructed 10-Unit Multifamily Property in Florida
April 4, 2024
Transaction Description:
George Smith Partners sourced an acquisition loan for a newly constructed 10-unit multifamily property in Florida. The borrower closed on the vacant property just after Certificate of Occupancy was received. Although the loan went into application several months ago, the seller was delayed in obtaining the C of O. Despite fluctuations in the capital markets, the lender held the fixed rate of 10.25%. The loan has a 9-month term with one 3-month extension option. A small interest reserve was structured to cover the initial payments while the property leases up.
Rate: 10.25% fixed
Term: 9 months with one 3 month extension
Origination Fee: 1%
Guaranty: Non-Recourse
- Advisors: Matthew Kirisits
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$23,500,000 Construction Financing for a 136,000 SF Industrial Park in a Southwestern State
March 21, 2024
Transaction Description:
George Smith Partners successfully arranged $23,500,000 in construction financing for the development of a 136,000 SF industrial park in a Southwestern State. The development includes two free standing buildings that can be programmed for manufacturing, distribution, or other industrial use, and is ideal for owner-users or single-user tenants.
The capitalization included land that had been owned free and clear for over two decades and contributed to the deal as Sponsor equity. GSP identified a lender that understood the land contribution and spec development elements of the deal. As well as the unique positioning of the two buildings as an underserved, small-scale, free-standing product in the State’s industrial market.
Terms: Not Disclosed
- Advisors: Brandon Asherian Grant Pugatch
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$9,800,000 Construction Financing for a 36-Unit Ground up Multifamily Property in a Southwestern State
March 14, 2024
Transaction Description:
George Smith Partners successfully arranged a non-recourse, stretch senior, construction loan of $9,800,000 for the ground up construction of a 36-unit mixed-used development in the submarket of a Southwestern State. GSP, through their expertise in multifamily development financing and strong relationships with a wide range of lenders, was able to negotiate favorable terms for their client including pari passu funding. The loan was priced at an 11.5% fixed rate with three, three-month extension options.
Building upon the Sponsor’s local market knowledge, the GSP team effectively packaged and supported the client’s 70% LTC financing request for the project’s duration. Upon completion, the project is poised to become a standout addition to the city’s Art’s District.
Rate: 11.5% fixed rate, full term interest only
Term: 18 months with three (3) three (3)-month extension options
LTC: 70%
Guaranty: Non-Recourse
- Advisors: Evan Kinne Ed Steffelin Jake Sachse Nick Shapiro
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$15,800,000 Bridge Loan for 91 Unit Multifamily Property in Lease Up in the Inland Empire, California
March 1, 2024
Transaction Description
George Smith Partners successfully arranged a $15,800,000 bridge loan for a newly constructed 91-Unit apartment complex in the Inland Empire. The complex is age restricted for independent senior living, 55 and over. Amenities include resort style pool, spa/hot tub, fitness center, recreation room, BBQ-Picnic area and hair salon. Demand has been strong as lease up began in May and the property is expected to be fully stabilized over the next few months. The financing allows borrower to push income and time an agency perm loan as rates (hopefully) decline.
Rate: 30 Day Term SOFR + 3.95% Floating
Term: 12 Months plus 2, 6 – month extensions
Amortization: Interest Only
Origination Fee: 0.5%
Guaranty: Non-Recourse
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$6,160,000 Senior Construction Loan for a Luxury Single Family Residence in Northern California
February 22, 2024
Transaction Description
George Smith Partners closed a $6,160,000 senior loan for the construction of a luxury single family residence in Northern California. The loan is fixed at a rate of 10.5% for 18 months with full term interest only payments. The Sponsor is the U.S. affiliate of a Brazil-based construction and design company. Because of the Sponsor’s extensive experience constructing and selling luxury homes in the market, the lender was able to get comfortable with the international sponsorship. The lender provided proceeds of 70% of the appraised value of the completed project.
Rate: 10.5% fixed rate, full term interest only
Term: 18 months with one 6 month extension option
Origination fee: 1.5%
LTV: 70%
- Advisors: Matthew Kirisits
