Transaction Description:
George Smith Partners secured $8,500,000 of senior construction financing for the development of a 35-unit ground-up multifamily building in Los Angeles, California. GSP was sourcing financing when banks were getting increasingly conservative in their underwriting, with leverage falling and compensating deposits required. Given the strong track record of the developer, GSP identified a bank that was able to maximize the leverage with no deposits held at the bank. The Sponsor was also able to use land equity in the capital stack.
The construction loan was priced at Prime + 1.25%. The loan term is 18 months plus one 6-month extension option.
- Rate: Prime +1.25%, with a Floor of 6.50%
- Term: 18 Months with One 6-month Option to Extend
- LTC: 65%
- Stabilized LTV: 60%
- Guaranty: Recourse
