Don't Miss a Fact,
Sign Up for FINfacts!

FINfacts is a weekly newsletter highlighting recent financings and economic insights.

Subscribe Here

8 Day Close on an $11,000,000 Cash-Out Loan for a Spec Single Family Home; Southern California

Rate: 7.99%
Term: 12 months
Amortization: Interest Only
Lender Fee: 1%
Prepayment or Minimum Interest Requirement: None
Legal/Loan Doc Fee: $425

Transaction Description:

George Smith Partners successfully advised on $11,000,000 for cash-out financing for the completion of a high-end luxury home in Los Angeles, California. The loan retired a higher interest rate and was also closed before certificate of occupancy was issued. GSP was able to source a lender who understood the significant value of the home from day one, did not require an appraisal, was comfortable with the Sponsor’s ability to receive COO, did not require the Sponsor to holdback any interest in a reserve account and did not have a minimum interest due or require a prepayment penalty. The 12-month loan term was structured to provide the Sponsor with time and flexibility to obtain certificate of occupancy and sell the asset within the Sponsor’s timeline.


Related Financings

  • Cash-Out 2.94%, $12,025,000 Non-Recourse Permanent Refinance on a 100% Leased Discount-Grocer Anchored Shopping Center; Western States

    August 4, 2021

    Transaction Description:

    George Smith Partners successfully placed $12,025,000 in non-recourse, cash-out permanent refinancing for a 101,096 square foot discount-grocer anchored retail shopping center in a transitory Pacific Southwest MSA. The tenant mix includes several national credit tenants along with local and regional stores, all of which remained in-place during COVID-19. GSP was able to identify a lender who understood the complexities of retail in a post COVID environment. The non-recourse permanent loan was sized to 65% of value, included 10-years of interest only payments at a fixed rate of 2.94% for 10 years. Lender fee is at par.

    Rate: 2.94%, Fixed
    Term: 10 years
    Amortization: Full-Term Interest Only
    LTV: 65%
    Lender Fee: Par
    Prepayment: Defeasance
    Guaranty: Non-recourse

  • $2,400,000 Cash-Out Refinance for a Neighborhood Strip Retail Center; North Hollywood, CA

    July 28, 2021

    Transaction Description:

    George Smith Partners successfully arranged $2,400,000 of cash-out on a free and clear neighborhood retail center with an automotive related tenancy in North Hollywood, CA. The subject Property was inherited by a family member and part of the cash out proceeds were used to pay estate taxes with the remaining funds going to the Sponsor and building up a reserve account. GSP went to a variety of lenders and identified a capital provider who was comfortable with the tenant mix, cash-out component, and Sponsor’s real estate experience.

    Rate: 3.875% fixed for 5 years
    Term: 7 years
    Prepayment Penalty: 3,3,3,2,1
    Guaranty: Recourse

  • $17,820,000 Cash Out Financing Fixed at 3.30% Interest-Only for Stabilized Multifamily Property; Phoenix, AZ

    July 28, 2021

    Transaction Description:

    George Smith Partners secured $17,820,000 of permanent financing for the refinance of a 164-unit multifamily complex located in Mesa, AZ. The Property, which was originally built in 1979, recently completed a renovation project that included updating unit interiors and exterior amenities. The unit mix is comprised of 1-bedrooms (49%) and 2-bedrooms (51%). Amenities include a pool, an open pet area, and an on-site laundry facility. GSP was able to a secure a 7-year fixed rate of 3.30%. The financing is interest-only for the entire term and non-recourse to the Sponsor. Refinancing provided the Sponsor with a much lower rate and a significant return of equity. The loan is sized to 60% LTV and a 1.35x DCR.

    Rate: 3.30% Fixed
    Term: 7 Years
    Amortization: Full-Term Interest-Only
    LTV: 60%
    Prepayment: Yield Maintenance
    Guaranty: Non-Recourse

  • $5,790,000 Non-Recourse Cash-Out Refinance for Three Multifamily Properties; LA County

    July 14, 2021

    Transaction Description:
    George Smith Partners successfully arranged the cash-out refinance of a three-property multifamily portfolio in Los Angeles County. GSP worked with the Borrower to rearrange his cash flows and expenses that were spread across a larger 10-property portfolio to break out the true operations of three buildings. GSP identified a fixed rate lender that could provide a non-recourse loan with approximately $1,000,000 return of equity to the Sponsor. The 5-year bank loan is fixed at 3.40% and is 65% of appraised value.

    GSP worked with the Lender on the underwriting and maximizing the cash flow of the Property to provide the Sponsor with the additional $1,000,000 used for future real estate acquisitions. GSP helped the Sponsor throughout the entire refinance process including the payoff of the previous loan.

    Rate: 3.40 Fixed
    Term: 5 Years
    Amortization: 30 Years
    LTV: 65%
    Prepayment: 3%, 2%, 2%, 1%
    Guaranty: Non-Recourse

  • $5,350,000 Cash-Out Refinance for Owner-User Office Property; Downtown Riverside, CA

    July 7, 2021

    Transaction Description:

    George Smith Partners arranged $5,350,000 in cash-out permanent financing for an owner-user office building located in Downtown Riverside, CA. The Sponsor approached GSP to help assist with the refinance of the Property to help relocate their company headquarters from the east coast. The Sponsor was on a strict deadline with their existing lender, only having 60 days to refinance before the current loan maturity. At the time of the refinance process, the Sponsor was close to completing exterior and interior renovations, including common area upgrades. GSP had to quickly identity a lender who could deliver certainty of execution on short notice, while delivering competitive terms. GSP was able to provide the Sponsor with a 25-year term, and the first 5 years being fixed at a low rate of 4%. The first 12 months are interest only, before converting to 25-year amortization thereafter. There is additional flexibility within the loan structure because there is no prepayment penalty. The cash-out loan allows the Sponsor to use more equity towards continuing to grow their business. Thanks to our long-standing relationship with the Lender, GSP was able to meet the Sponsors deadline and close this transaction within 60 days.

    Rate: 4% fixed for 5 Years
    Term: 25 Years, First 12 Months Interest Only
    Min DSCR: 1.25x
    Prepayment: No prepayment penalty

  • 2.52% Floating Rate – 7-Years IO – Cash-Out – Stabilized Multifamily; Kent, WA

    July 7, 2021

    Transaction Description:

    George Smith Partners secured a senior floating rate loan for a stabilized multifamily property in Kent, WA. The non-recourse debt totaling $12,200,000 was utilized to refinance existing acquisition bridge debt and return of a significant amount of equity to the Ownership. The loan was structured with a 7-year term and interest only payments for the entire duration. The loan was collateralized by a 95-unit multifamily building; the Subject was 97% leased at closing. The Sponsorship had recently renovated approximately 70 of the units with plans to complete the remaining 25 units over the next 18 months.

    GSP selected a lender that offered an extremely attractive coupon. The variable rate provided the Sponsorship flexible prepay in the event of a future sale while supplying cash-out proceeds at funding. GSP negotiated a very minimal 2-year rate cap, and the Lender waived all Covid debt service reserves. The Property appraised for more than expected and GSP worked with the Lender to both increase the proceeds and reduce the spread.

    Rate: 2.51% + 1-Mo SOFR
    Term: 7 years
    Max LTV: 60%
    Amortization: None; 10-Years Interest Only
    Origination Fee: 1%
    Prepayment: 1% Exit; 3-Months open; PP waived w/ Lender Refi