$5,794,000 Condo Inventory Loan, 8.80% Rate, No Prepay

Transaction Description: 

George Smith Partners sourced $5,794,000 in bridge financing for a residential condominium building in California. The borrower has successfully sold half of the units at the property, but the previous loan was due. The new loan provides additional time to complete the sales. It includes a 6-month interest reserve and has no prepay or minimum interest requirement. While the previous loan required all sales proceeds to go to the lender, the new loan allows for a portion of sales proceeds to be distributed to the Sponsor. 

The loan is floating at a rate SOFR + 4.49% with a floor of 8.80%, well below market rates for similar bridge loans. The only signer on the loan is the Managing Member of the borrowing entity. By comparison, most of the lenders in the market quoted a higher rate and required full recourse to both the Manager and the Limited Partners. The loan closed 30 days from the signed application.