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

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

Subscribe Here

$8,400,000 Bridge to Perm Financing for 122-Unit Multifamily Portfolio; Dallas Texas

Rate: 7.4% Fixed
Term: 5 Years
Prepayment Penalty: 3, 2, 1, 0
Amortization: Interest Only 24 Months
LTC: 80%, 100% Rehab & Renovation
Guaranty: Recourse

Transaction Description:

George Smith Partners secured $8,400,000 for an acquisition bridge to perm loan for a 122-unit multifamily Property portfolio in Dallas, Texas. The Property had a single family that owned the project for over 20 years and never tried to push rents, so the debt service coverage at closing was below 0.20x. For most lenders, this was a quick pass, but GSP utilized its vast relationships and experience in the community development space to identify a unique mission-based bridge lender who would see the community benefit for the renovation of this property.

In addition to the low debt yield, the property also had a higher vacancy than the rest of the market and higher expenses. Because of our relationship with the Lender, we were able to expedite the application process. GSP assisted the Sponsorship team in developing a strong business plan and creating a clear vision of how to reach their occupancy goals. This included proving the benefits of the Sponsorship structure which incorporated their experienced in-house rehab team, as well as getting the Lender comfortable with the Sponsorship’s overall mission. GSP understood the dynamics of the Sponsorship team and helped the Lender understand the strategy that would allow for a quick lease-up and a stronger NOI.


Related Financings

  • Acquisition Bridge Loan for a 12-Unit Multifamily Community; San Diego, CA

    May 18, 2022

    Transaction Description:

    George Smith Partners secured an acquisition bridge loan for the repositioning of a Class-C apartment community in San Diego. The financing includes a holdback that will be used to renovate both the interior and exterior of the Property over a 12-month period including the addition of a single ADU (garage conversion).

    Given the Sponsors’ track record and their successful ability to substantially increase rents in this niche market, GSP was able to secure a Lender that could close quickly (within 25 days), without an appraisal, and allow a $1,000,000 2nd TD up to 98% of the total cost of the Project to accommodate an additional private party investment in the Property.

    Rate: 7% Fixed
    Term: 18 months + 6-month extension
    Min DSCR: 1.15:1.0
    Origination Fee: 1.5%
    Amortization: Interest-Only
    Guaranty: Recourse
    Prepayment: None

  • $102,000,000 Non-Recourse Bridge Financing for an Ultra-Luxury 37-Unit Multifamily Asset; West Hollywood, CA

    March 30, 2022

    Transaction Description:

    George Smith Partners successfully arranged $102,000,000 (approx. $2.75M/unit) in non-recourse, bridge financing for a 37-unit, ultra-luxury apartment building located in the heart of West Hollywood. The fully condo-mapped project features hotel-level service and amenities including daily breakfast, airport drop-off, wellness classes, cooking classes, wine tastings, entertainment lounge, private dining room & kitchen, screening room, fitness center, yoga studio and a leather-paneled bowling alley. The asset boasts some of the highest rental rates on the West Coast.

    Located in one of Los Angeles’ most coveted retail and residential neighborhoods, this trophy asset caters to wealthy residents seeking an amenity-rich community with minimal maintenance and maximal convenience. The best-in-class Sponsor recognized the investment potential of an ultra-luxury product in a prized location—the revered “pumpkin patch” site in West Hollywood. In working with potential lenders for this financing, GSP was able to identify a capital provider who not only understood the as-is value and in-place cash flow of the operating multifamily asset, but also the potential future value as 37 individual high-end condos. The loan closed in 50 days from application.

    All Terms Confidential

  • $30,139,000 Construction Financing for an Office-to-Hotel Conversion; Tucson, AZ

    March 22, 2022

    Transaction Description:

    George Smith Partners successfully arranged $30,139,000 in construction financing for the phased adaptive reuse of a landmark office tower into a 145-key upper-upscale lifestyle hotel with boutique-quality amenities. Located within a Qualified Opportunity Zone in the heart of Downtown Tucson, the Project is a focal point in the downtown skyline, offering unparalleled accessibility to numerous restaurants, bars, shops, and entertainment venues.

    The financing capitalized renovation costs related to the redevelopment of the office tower; the Project also qualified for valuable tax benefits intended to spur new development in the surrounding area.
    The Downtown Tucson market currently has only one upscale lifestyle hotel, while market growth has created a strong demand for upscale product within the hotel sector. Bolstered by local knowledge and industry expertise, the top-tier Sponsorship team recognized the gap within the market and identified the asset as a unique opportunity to create a transformative hotel in the city’s employment and social epicenter. GSP was able to identify an institutional-quality lender who not only understood the substantial value of the Project’s tax benefits in a high-growth market, but also the Sponsor’s ability to execute on the business plan.

    All Terms Confidential

  • $53,710,000 Non-Recourse Bridge Financing for a Six Property Portfolio Comprising Conventional Multifamily & Co-living Properties; Los Angeles, CA

    March 16, 2022

    Transaction Description:

    George Smith Partners successfully arranged $53,710,000 in bridge financing for a six-property portfolio comprising three conventional multifamily properties and three co-living properties totaling 113 units (278 beds) in Los Angeles. All six of the properties are in various stages of lease-up. The non-recourse bridge financing refinanced existing construction debt from four unrelated lenders, provided a significant cash out to the Sponsor and allows more time for continued rent recovery in Los Angeles, in anticipation of permanent long-term financing.
    The Properties are in highly dense submarkets with significant levels of rentership, with vacancies approaching 3%. The housing crisis in Los Angeles has yielded significant pent-up demand for attainable housing options. The best-in-class Sponsor recognized the substantial value of the high quality multifamily and co-living properties in strong growth submarkets where demand has consistently outweighed supply, especially for new product. GSP was able to identify a lender who was able to get comfortable with the business plan due the Sponsors familiarity with the markets and demonstrated success with both conventional and co-living properties.

    Interest Rate: SOFR + 4.14% (SOFR floor of 0.10%)
    Term: 3+1+1
    Guaranty: Non-Recourse

  • $3,060,000 Multifamily Acquisition/Bridge Loan; Oklahoma City, OK

    January 26, 2022

    Transaction Description:

    George Smith Partners secured a $3,060,000 loan for the acquisition of a 114-unit multifamily property located in Oklahoma City, OK. To meet the sellers 60-day closing requirement, GSP used its relationship with a lender we had closed multiple loans with. This lender recently closed a similar loan in this market which allowed them to feel comfortable with the market characteristics. Although the Property is currently over 90% leased, rents were below market because the Seller self-managed and the Property needs exterior and interior improvements. The Sponsor wanted to lock in a low rate to allow for more cash flow to be used towards their value-add strategy. This was cheaper and more efficient than a traditional bridge loan. During the close of this loan, GSP was simultaneously helping the Sponsor purchase the Property directly next door. The long-term business plan is to combine both properties to become one property within 2 years. The loan represents 70% of the purchase price and was structured as a fixed rate 5-year term, with the first-year interest-only. The interest-only period allows for more property cash flow to be used towards building improvements. Additional flexibility is also provided with a prepayment equal to 3-1-0-0-0. The prepayment flexibility will allow the Sponsor to cash-out refinance once they have implemented their value-add strategy.

    Rate: 3.60%
    Term: 5 Years
    Amortization: 30 Years
    Prepayment: 3%, 1%, 0%, 0%, 0%

  • $10,000,000 Acquisition Loan to Purchase Hotel for Multifamily Conversion; Mountain States

    November 3, 2021

    Transaction Description:

    George Smith Partners successfully brokered both the sale and acquisition financing for an extended stay hotel conversion located in the Mountain States region. The Seller, initially intending to undertake the Project, engaged GSP to source bridge financing for the 126-apartment conversion. Most of the conversion will be cosmetic changing the feel from hotel to residential. The hotel had been closed due to COVID, but the Sponsor needed to cancel the Management Agreement with the Operator and vacate the hotel. Because the hotel was in foreclosure, the Seller put the asset in bankruptcy before the trustee sale. This complicated the transaction and resulted in closing the deal two weeks from court approval.

    GSP found a buyer with experience in hotel conversions who understood the Property’s value proposition and the bankruptcy process. With limited time, GSP represented the Sponsor in sourcing $10,000,000 of 3-month Gap financing for the purchase while concurrently working on inexpensive bridge financing. No appraisal was required for the Gap loan. This was an extremely complicated financing with exceptionally short time constraints. GSP was able to serve the needs of both Buyer and Seller and successfully secure financing.

    Rate: 7.95%
    Term: 3 Months
    LTV: 68% Loan to Purchase Price
    Guaranty: Non-Recourse