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90% LTV Acquisition Financing for 6-Unit Building; Beverly Grove Area of Los Angeles, CA

Blended Rate: 7.93%
Term: 12 Months
Amortization: Interest Only
LTV: 90%
Blended Loan Fee: 1.67%
Prepayment Penalty: None
Guaranty: Non-Recourse

Transaction Description:

George Smith Partners secured $2,475,000 (90% Loan to Purchase Price) of senior and mezzanine financing for the acquisition of a 6-unit multifamily building in the Beverly Grove area of Los Angeles. The loans both have a 12-month term and are open to prepay at any time. The Sponsor plans to use the term to entitle the building for a potential future development. The non-recourse financing allowed for the Sponsor to contribute a minimal amount of equity into the purchase of the Property. The blended rate came out to 7.93% across the entire capital stack.


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    January 27, 2021

    Transaction Description:

    The Sponsor had the opportunity to purchase a well-located property in Koreatown well below the market value because of the sponsor ability to close quickly with the 80% LTC quick-close loan. With the global pandemic, the property had 2 vacancies and a few non-paying residents. Because of the quick timing and the short-term distress in the cashflow, the Property would not qualify for bank or agency financing at this time. The sales broker and the Sponsor approached George Smith Partners for highly leveraged, quick purchase financing. GSP arranged a $2,695,000 non-recourse acquisition loan for the 16-unit apartment project. Despite marketing this deal during the global pandemic with vacancies and unpaying tenants, GSP successfully structured a first trust deed from a debt fund as well as a preferred equity B piece with a different investor to almost 80% of the purchase price. The non-recourse facility was priced at an interest-only fixed rate with a blended rate of 7.97% with a 12-month term plus a 6-month extension option. Thanks to our long-standing relationship with this debt fund and preferred equity investor, GSP was able to close this transaction in less than 10 days from signing the term sheet.

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  • $13,340,000 Acquisition/Bridge Loan for Six-Property Multifamily Portfolio; Long Beach, CA

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  • $16,100,000 Non-Recourse Acquisition Bridge Financing for a 30-Unit Trophy Multifamily Value-Added Project; West Los Angeles, CA

    October 14, 2020

    Transaction Description:

    George Smith Partners arranged $16,100,000 in non-recourse, acquisition bridge financing on a 30-unit trophy multifamily property in West Los Angeles, California. The Property featured significant below-market rents, deferred maintenance, and physical vacancy (in part due to roommates that decided to downsize in light of COVID-19). The value-add business plan will involve a large capital expenditure budget to renovate the Property’s exterior and units, and reposition the asset utilizing a specialist property manager focused on providing family-oriented housing product with amenities like technology integration, childcare services, and community programming. The Sponsor’s expertise coupled with the Property’s trophy location created a competitive lending environment despite the ongoing pandemic. GSP ran a robust process including marketing the deal to over 70 lenders and fielding multiple lender proposals. The non-recourse financing was sized to 70% LTC and featured a rate of 1-Month Libor plus 500 basis points for a three-year term plus extensions.

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  • 90% LTC for Acquisition of 6 Units – Closed in 12 Days; Los Angeles, CA

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    Transaction Description:

    George Smith Partners arranged $3,183,000 of senior and mezzanine financing for the acquisition of a 6-unit multifamily building located in Los Angeles, CA. The combined debt was sized to 90% of purchase price. The Property was purchased with the intention of future development. The proposed project would add more units to the supply-constrained submarket. The senior loan was sized to 60% of purchase and carries a 7.50% fixed interest rate. The mezzanine financing provided the remainder (up to 90%) and is priced at 12.00%. The financings were closed within 12 days of the term sheets being signed.

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    Transaction Description:

    George Smith Partners placed a $5,575,000 acquisition loan for the purchase of a 38-unit multifamily unit located in the Los Angeles MSA. The loan has a rate of 3.6% for a 7-year term and includes three years of Interest Only payments. The term sheet was signed shortly before the COVID-19 crisis and ensuing economic volatility. Despite these conditions, the original rate and leverage was kept intact.

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