$7,200,000 Class-C Multifamily Oklahoma Reposition to 72% LTV

Transaction Description: George Smith Partners placed the 72% loan-to-value bridge refinancing for a two-asset 248 unit Class-C Apartment portfolio in Oklahoma City, Oklahoma. The Subjects were mismanaged and underperforming, precluding permanent lenders from underwriting to the current loan payoff. One asset suffered a sudden drop in occupancy one month prior to this refinance. Additional funds were needed for rehabilitation and cosmetic upgrades to remain competitive in the market. This execution paid off the existing ballooning loan and provided additional cash-equity for capital upgrades. Fixed at 9.0%, the 24 month non-recourse loan was funded in 10 business days. A 1.0% lender origination fee and a 0.9% exit fee are required beyond a 12 month yield maintenance prepayment.

Challenges: A recent short sale for an unrelated property and pending litigation with the existing loan servicer prevented most institutional lenders from underwriting our Sponsor. A sudden decrease in occupancy and noticeable water intrusion highlighted the poor management and differed maintenance.

Solutions: GSP identified a private capital source who was comfortable with the current property condition, understood the upside potential post-rehabilitation and could execute in a very short timeframe; preventing the Borrower from going into default. Litigation exposure was qualified and quantified; the Sponsor demonstrated the financial capacity to mitigate if necessary. Market strength and asset location combined with an executable business plan that replaced current management and clearly mapped out a capital improvement program permitted us to underwrite future occupancy and improved cash flow.