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$8,700,000 Non-Recourse Predevelopment Land Loan in Los Angeles’s Hollywood Neighborhood; 14-Day Close

Rate: 6.90% Fixed
Term: 12 Months
Amortization: Interest Only
Loan to Value: 60%
Lender Fee: 1.00%
Prepayment: Open Full Term
Guarantee: Non-Recourse

Transaction Description:

GSP arranged the $8,700,000 non-recourse first mortgage from a REIT to refinance a maturing bridge loan on a recently entitled retail site located along a major thoroughfare in Los Angeles. The loan provides an additional 12 months of term while the Borrower evaluates whether to re-entitle the site for a mixed-use project, or move forward with in-place entitlements. Although the loan is non-recourse, the Lender did not require an appraisal or other third-party reports, nor did it require an interest or carry reserve despite insufficient cash flow to cover debt service. Sized to 60% of value, the loan priced at 6.90% fixed for the 12-month loan duration.

Related Financings

  • $4,680,000 Paper Lot Land Acquisition Loan in Ten Days; San Diego, CA

    August 18, 2021

    Transaction Description:
    George Smith Partners successfully placed a $4,680,000, 50% LTV loan to fund the acquisition of a 6.9-acre parcel of land located in North County, San Diego, California, and the funds needed to finalize the entitlements for 135 paper lot townhome subdivision.

    When GSP became involved, the Borrower had already invested over $2,300,000 to secure a tentative map and development agreement while the land was under option. However, there were only ten days remaining on the purchase contract when the land lender with whom the Borrower had been dealing with directly, declined to proceed. When the Seller refused to grant the Buyer an extension on the purchase escrow, GSP was engaged to arrange the land acquisition financing to enable a timely closing.

    GSP had several highly reliable alternative land lenders that could close within ten days. Strategically, GSP selected a lender that was not only willing to finance the land acquisition and final entitlements, but also was willing to give the Sponsor a strong indication that they would favorably consider funding the future stages of the project, including the grading, horizontal land, and infrastructure development as well as the vertical construction financing once the final map was achieved in approximately nine months.

    Rate: 10%
    Term: 18 Months
    LTV: 50%
    Guaranty: Non-Recourse with Bad Boy Carveouts
    Fee: 3%

  • $2,800,000 Land Acquisition Financing for a Self-Storage Project; Santa Clarita Valley, CA

    December 4, 2019

    Transaction Description:

    George Smith Partners successfully arranged a $2,800,000 non-recourse, short term acquisition loan for a 4.21-acre parcel near Stevenson Ranch in the Santa Clarita Valley of California. The Sponsor needed financing in a very short timeframe. GSP was able to source a private lender who closed in three business days. The loan offers 60 days of bridge term while the Borrower seeks a construction-to-permanent solution for a fully entitled, six-building, 966-unit, climate controlled, Class-A self-storage facility expected to complete construction in late 2020. The loan is non-recourse and the Lender did not require an appraisal or other third-party reports, thanks to the low leverage and strength of the Sponsor.

    Rate: 7.90% Fixed
    Term: 60 Days
    Amortization: Interest Only
    Loan To Value: 36%
    Prepayment: None
    Guaranty: Non-Recourse

  • $3,500,000 Pre-Development Non-Recourse Bridge Loan; San Fernando, CA

    July 31, 2019

    Transaction Description:

    George Smith Partners placed the cash-out non-recourse refinance of an improved San Fernando Valley lot that had been vacated while the Developer moves forward on an up-zone re-entitlement. Our Sponsor will double the available units on this over-sized lot bringing needed housing to this dense in-fill tract. Proceeds beyond the existing payoff will be used to cover soft costs and will be invested back into the site development. The exit will be via a ground-up construction loan to be funded late 2019. Closing occurred within two weeks from executed application to funding. No appraisal was required for funding. Fixed at 7.50%, the non-recourse loan does not carry a prepayment penalty.

    Rate: 7.50%
    Term: 12 months
    Amortization: Interest Only
    Loan Fees: 1.0%
    Guaranty: Non-Recourse
    Prepayment Penalty: None

  • $9,200,000 Non-Recourse Predevelopment Land Loan in Los Angeles’s Beverly Grove Neighborhood; 14-Day Close

    October 31, 2018

    Transaction Description:

    GSP arranged the $9,200,000 non-recourse first mortgage from a REIT to refinance two separate maturing bridge loans on two non-contiguous, recently entitled land parcels totaling 24,725 square feet located along a major thoroughfare in Los Angeles. The loan repaid existing debt, covered 100% of closing costs, and repatriated equity to the borrower. The loan provides an additional 12 months of term while the borrower pre-leases the project and finalizes construction drawings. Although the loan is non-recourse, the lender did not require an appraisal or other third-party reports, nor did it require an interest or carry reserve although there is no in-place cash flow on either parcel. Sized to 60% of value, the loan priced at 6.90% fixed for the 12-month loan duration.

    Rate: 6.90% Fixed
    Term: 12 Months
    Amortization: Interest Only
    Loan to Value: 60%
    Lender Fee: 1.00%
    Prepayment: Open Full Term
    Guarantee: Non-Recourse

  • $8,750,000 Non-Recourse Predevelopment Land Loan in Coastal Los Angeles; 14-Day Close

    September 26, 2018

    Transaction Description:

    GSP arranged the $8,750,000 ($935/Building SF) non-recourse first mortgage from a REIT to refinance a maturing bridge loan on a 29,500 square foot land parcel located along a major thoroughfare in Coastal Los Angeles. The Borrower recently entitled the land for a retail redevelopment and is now pre-leasing the Project. The loan repaid the existing debt, covered 100% of closing costs, and repatriated equity to the Borrower. The loan provides an additional 12 months of term while the Borrower pre-leases the Project. Although the loan is non-recourse, the Lender did not require an appraisal or other third-party reports, nor did it require an interest or carry reserve although there is no in-place cash flow. Sized to 60% of value, the loan priced at 6.90% fixed for the 12-month loan duration.

    Rate: 6.90% Fixed
    Term: 12 Months
    Amortization: Interest Only
    Loan to Value: 60%
    Lender Fee: 1.00%
    Prepayment: Open Full Term
    Guarantee: Non-Recourse

  • $7,250,000 Non-Recourse Predevelopment Land Loan in Coastal Los Angeles; 14-Day Close

    August 22, 2018

    GSP arranged the $7,250,000 ($328/Land SF, $1,375/Building SF) non-recourse first mortgage from a debt fund to refinance a maturing bridge loan on a 22,150 square foot land parcel located along a major thoroughfare in coastal Los Angeles. The Borrower recently entitled the land for a retail redevelopment and is now pre-leasing the to-be-constructed improvements. The loan repaid the existing debt, covered 100% of closing costs, and provides the borrower with an additional 12 months of loan term while it pre-leases the project and gains final site plan approval from the City. Even though the loan is non-recourse, the Lender did not require an appraisal or other third-party reports, nor did it require an interest or carry reserve although there is no in-place cash flow. Sized to 60% of value, the loan priced at 6.90% fixed for the 12-month loan duration.

    Rate: 6.90% Fixed
    Term: 12 Months
    Amortization: Interest Only
    Loan to Value: 60%
    Prepayment: Open Full Term
    Guarantee: Non-Recourse