$9,725,000 of Preferred Equity for two Multi-Family Properties in Los Angeles

Transaction Description:  GSP successfully placed tranches of preferred equity on two separate stabilized multifamily complexes for one client. GSP identified the preferred equity provider offering the best pricing and a maturity co-terminus with the new senior debt.

Challenge: GSP was tasked with finding a preferred equity provider who was comfortable investing behind one of the agencies, which has not traditionally allowed subordinate financing. Additionally, senior lender approval issues arose prior to funding the senior debt that complicated the closing of the preferred equity.

Solution: GSP worked exhaustively to identify the lender with the lowest cost of funds who could provide preferred equity co-terminus with the senior debt and acceptable to the agency lender. GSP made certain that the senior lender and client were comfortable with the equity provider, overseeing communication between all parties involved. GSP intensively managed the entire process and documentation leading up to the funding of the senior tranche. After closing the senior debt, GSP kept the senior lender involved in the preferred equity discussions to facilitate the preferred equity closing process. The current pay-rate of 8.0% is collected through year 5. The total blended coupon is below 6.0% for each property at an 82% loan-to-value.