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70% LTC Construction Loan for 11-Unit Apartment Building; Los Angeles, CA


Rate: Prime +1%, with a floor of 5%
Construction Term: 18 months + 6-month option to extend
Mini-perm Option: 5-year treasury + 2.25% with a 3.50% floor
LTC: 70%
LTV: 58%

Transaction Description:

George Smith Partners arranged $2,580,000 in construction financing for a ground up development project in Los Angeles, California. The construction loan floats at a rate of Prime + 1%. The 70% loan-to-cost construction loan also comes with the option to convert to a 5-year mini-perm loan upon completion based on the 5-year treasury plus a margin of 2.25%, with a 3.50% floor, eliminating any future financial risks. GSP sourced a lender during the COVID-19 pandemic that was able to move efficiently and most importantly accommodate the Borrower’s development timeline and experience.


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  • $40,700,000 Non-Recourse Ground-Up Apartment Construction Financing to 85% LTC with a Blended Rate of 6.80%; San Diego, CA

    December 9, 2020

    Transaction Description:

    George Smith Partners successfully placed the $40,700,000 construction financing, which funded up to 85% loan to project costs for the construction of a 170-unit apartment community located in a southern San Diego submarket. The financing structure included a senior construction loan up to 55% loan to cost and a mezzanine tranche up to 85% of total project costs. The non-recourse mezzanine tranche is structured on an accrual basis, further reducing the total economic impact of the mezzanine financing on the project. The full capital stack is non-recourse. Additionally, the capital partners gave credit for a lift in land value above the actual cost due to the Sponsors prior entitlement work and achieving approvals. While navigating these unprecedent times in the capital markets brought upon us by the COVID-19 Pandemic, GSP utilized our extensive experience, long-standing lender relationships, and capital markets creativity to achieve the Sponsors goals in order to break ground and deliver a much-needed product type in the market.

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    Transaction Description:

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