$5,700,000 Non-Recourse Acquisition Bridge Financing for a 2-Property Multifamily Portfolio; 80% LTC and 7.5% Debt Yield; Gardena, CA

Rate: 6.90%
Term: 3 Years
Amortization: Interest only
LTC: 80%, including future funding
Guarantee: Non-Recourse
Lender Fee: 1% in / no exit fee
Prepayment Penalty: 12-month interest guarantee

Transaction Description:

George Smith Partners arranged $5,700,000 in non-recourse acquisition bridge financing for a two-property value-added multifamily portfolio in Gardena, CA. The two 1960’s vintage properties had significant deferred maintenance and below market rents. The Sponsor’s business plan was to reposition the Property and release the units at market rents. Maximum proceeds, despite a tight debt yield, and non-recourse were priorities.

George Smith Partners sourced a lender familiar with the market and willing to size the loan to a 7.5% debt yield, which resulted in 80%LTC. The loan, which offers an attractive parri-passu funding structure, includes future funding for a full gut renovation of unit interiors and an exterior upgrade. The three-year bridge loan is interest only and carries a fixed interest rate of 6.90%. Interest is not charged on the holdback until funds are drawn. The lender fee was limited to a 1.00% origination fee with no exit fee. The Lender did not charge a legal fee and closed the transaction in 30 days from term sheet execution.

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