$8,250,000 Cash-Out Unentitled Land Loan Recap; Van Nuys, CA

Rate: P+4.0% w/10% Floor
Term: 12 months
Recourse: Carve-Outs Only
Fees: 1.0%
Prepayment: Six-month minimum yield; no exit fee: P+4.0% w/10% Floor

Transaction Description:

George Smith Partners placed a cash-out $8,250,000 non-recourse loan for the partnership recapitalization of an entitled parcel in Van Nuys which is located in the San Fernando Valley of Los Angeles, CA. The Sponsor has been working through the permitting process for residential development. GSP identified a non-institutional lender who underwrote the business plan assuming a sale to a related entity upon ready-to-issue (RTI) permits. Their exit will come in the form of the pre-arraigned Joint Venture funding and a to-be-identified construction lender. Excess proceeds were utilized to buy-out an LP investor and recapitalize the Borrower and carry costs through to RTI. The non-recourse loan will float for the 12-month term at Prime + 4.0%. There was no appraisal, or Phase I report required for funding.

Advisors

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    January 29, 2020

    Transaction Description:

    George Smith Partners arranged a $4,200,000 cash-out refinance for predevelopment land financing on a to-be-built 90-unit multifamily property in West Oakland, CA. The Property consists of a 1.5-acre parcel and 35,000 square feet of raw industrial space built in the 1950s that will be demolished at the start of construction. The Property recently obtained entitlements for a 90-unit multifamily development, but the Sponsor required significant capital and about 12 months to complete construction drawings. The Sponsor was seeking a refinance and approached GSP with 30 days of term remaining on their existing land loan. The existing land Lender would not release the good news money earmarked for a successful entitlement that would have been used to fund construction drawings. They were also seeking to charge an extension fee that was significantly above market.

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    Rate: 8.99%
    Term: 12 months with two 3-month extensions
    Amortization: Interest only
    LTV: 65%
    Prepayment Penalty: None
    Lender Fee: 0.5% in / 1% out
    Guarantee: Recourse

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    $3,500,000 Cash-Out Financing for Land on Melrose Ave and La Brea Blvd; Los Angeles, CA

    August 7, 2019

    Transaction Description:

    George Smith Partners secured financing for a $3,500,000 loan on a former gas station at the corner of Melrose and LaBrea. The challenge was finding a bridge lender willing to lend on vacant land entitlement by-right for multi-family residential that will not commence construction for at least 18 months while also providing $500,000,000 in cash-out proceeds.

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    Rate: LIBOR + 460 with 7% Floor
    Term: 2 Years
    LTV: 50%
    Amortization: Interest Only
    Yield Maintenance: None
    Guaranty: Full Recourse

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