Term: 3 year term with two 1-year extension options and 33 bps extension fee contingent upon min 1.20 DSCR, max LTV of 65%
Amortization: 25 years
Loan to Value: 70% max LTV “as is”, 65% LTV at each extension
Yield Maintenance: 24 months
Guaranty: Partial-Recourse, 25% of the loan amount
George Smith Partners arranged $5,900,000 of cash-out refinancing for a 21,220 SF office property occupied by a non-profit tenant in Pasadena, CA. The Property is 100% leased to a non-profit tenant with 4.5 years of remaining on the lease term. The challenge was finding a 5 year loan term option despite the short term nature of the lease.
GSP was able to exceed the Sponsors expectation with respect to cash-out proceeds which were based on 70% “as is” LTV. The 5-year floating-rate execution is partial-recourse and amortizes over 25 years with a partial cash flow sweep while still providing net cash flow to the Borrower. The floating rate was 370 bps over the 30 day Libor.
Acquisition Bridge Loan, 73% Loan to Cost for a 13 Unit Multifamily Property in South Los Angeles, CA
June 12, 2019
George Smith Partners arranged acquisition bridge financing for a value-add multifamily property in the Westmont Neighborhood of South Los Angeles, California. The 13 unit, 1950’s vintage Property 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. Sized to 73% of total project cost, the financing includes 100% of future funding for a full gut renovation of unit interiors and an exterior upgrade.
The two year bridge loan is interest only and floats at Prime plus 0.5% (6.00% today) with no prepayment penalty. Interest is not charged on the holdback until funds are drawn. The Lender only required a recourse obligation from the general partner who represented 10% of the equity, even though there were limited partners representing over 25% of the equity. The lender fee was negotiated down to 0.5%.
Rate: Prime + 0.5%
LTC: 70% / 65%, including 100% of future funding
Term: 2 Years
Amortization: Interest Only
Prepayment Penalty: None
Recourse: Full Recourse
Lender Fee: 0.5%
- Advisors: Zachary Streit
$13,944,000 ($1,180/SF) Non-Recourse Construction Financing for the Redevelopment of a Former Single-Tenant Office Property in Santa Monica, CA
June 12, 2019
George Smith Partners placed $13,944,000 in non-recourse construction debt for the conversion of a former single-tenant office property into an 11,800 square foot, luxury, multi-tenant retail property in a prime submarket of Santa Monica, California. GSP diligently worked to source a lender comfortable with funding a loan at a high basis of $1,180/SF for a “first-mover” redevelopment that was 64% pre-leased (on an economic basis) at record-setting rents to a mix of local and regional food and fitness users. Further complicating the loan request was the need to allocate separate components of the “bad boy” non-recourse carve-outs among two unrelated guarantor entities. Approximately 55% of the loan proceeds were future funded with no interest paid on unfunded loan proceeds until drawn.
Rate: One-Month LIBOR + 4.25% (6.75%) at closing burning down to One-Month LIBOR + 3.75% (6.25%) upon stabilization
Term: Three-year initial term plus two one-year extension options
Amortization: Interest only
Debt Yield: 8.5% stable debt yield
LTV: 70% as-complete value, 60% as-stable value
Prepayment: Open prepayment with 24-month spread maintenance
Lender Fee: 1%
June 12, 2019
George Smith Partners arranged $23,600,000 in non-recourse construction financing for the ground-up development of a 118-key select-service, extended-stay hotel in downtown Davis, California. Sized to 82.5% of total project cost, the interest only loan will float at a spread of 825 basis points over one-month LIBOR for three years and carries two 12-month extension options. With immediate access to the highway, the Project is five minutes from UC Davis and 20 minutes from downtown Sacramento. This financing allowed the Sponsor to begin construction on their third hotel project near the University.
GSP sourced a lender who shared the Sponsor’s vision and negotiated a unique and capitally efficient funding structure on the behalf of the Client. GSP demonstrated the submarket’s resilient occupancy rates and the Project’s appealing design relative to the submarket’s dated competitive set.
June 5, 2019
George Smith Partners secured the cash out refinance of a 15-unit stabilized multifamily property in Downey. Constructed in 1980 the Property is located in the heart of Downey, close to restaurants and retail centers. Fixed at 4.35% for seven years, the non-recourse loan floats at 6-month LIBOR + 2.25% for the remaining 23-year term. The non-recourse loan has 3 years of interest only payments and a 4,3,2,1 step down prepayment penalty.
Rate: 4.35% Fixed for 7 years; 6 Month LIBOR + 2.25% thereafter
Term: 30 years
Amortization: 3 years interest only, followed by 27 years amortization
Prepayment Penalty: 4,3,2,1
Origination Fees: Par
June 5, 2019
George Smith Partners secured a $4,050,000 acquisition loan for 3 contiguous multifamily buildings located in Toluca Lake (Los Angeles), CA. While there are currently 11 units on the 3 parcels, the Sponsor is in the process of designing a 57 unit multifamily project. This development is allowed “by right” but must go thru planning commission for final approvals and will utilize the density bonus regulations. The proposed building will feature a mix of 1 and 2-bedroom units and will provide more rental housing for the local community. The final project will have an affordable component, boosting the supply of units for designated for low income tenants. The Project is walking distance to the Universal City metro rail stop. Nearby employers include Universal Studios, CBS, and Warner Brothers.
The non-recourse financing was sized to 85% of purchase price at an interest rate of 9.50% for 18 months for a 1.5% lender fee. The high leverage loan allowed the Sponsor to minimize their initial equity investment into the deal. The Sponsor plans to replace this loan with construction financing once the Project is ready to break ground. This Lender has the ability to convert some or all of their acquisition loan to a mezzanine position up to 85% of total construction cost behind the future construction loan.
$14,950,000 Non-Recourse Financing for the Acquisition of a 17-Property Single Tenant Dollar General Portfolio
June 5, 2019
GSP successfully placed $14,950,000 of non-recourse, 14-year (with an anticipated repayment date ten years from the initial closing) fixed-rate debt for the acquisition of 17 newly-constructed freestanding retail buildings 100% leased to Dollar General. The individual assets have 15-year lease terms and are located primarily in tertiary Upper Midwest states. GSP executed the financing concurrent with construction completion and sourced a lender able to provide 75% leverage financing at a 4.52% blended fixed coupon with five years of Interest Only payments, despite an absence of sales history and concurrent tenant lease terms expiring one year after loan maturity. The loan structure also provides the Sponsor flexibility to release properties from the loan collateral in the event of sale after year three of the loan term and allows the Sponsor to release up to 30% of the individual assets from the mortgage collateral and substitute like kind properties through year nine of the term.