Transaction Description:

George Smith Partners identified a national balance sheet lender with an intimate knowledge of the Hayward submarket and arranged $8,400,000 in acquisition and bridge financing for the purchase and reposition of a currently 50% occupied, 1960’s-built apartment complex located in Hayward, CA. The Sponsor placed the portfolio under contract during the COVID-19 pandemic.

The loan includes $1,350,000 of future funding for extensive renovations of unit interiors and exterior upgrades, including an earthquake retrofit. Interest is not charged on the holdback until funds are drawn. This Capital Provider also structured and capitalized an interest reserve to cover the shortfall of cash flow during repositions. Sized to 76% of the total capitalization, the three-year bridge loan is interest only for 36 months and carries a floating rate of LIBOR + 4.25% and include two extension options for up to a term of five-years.

Rate: LIBOR + 4.25%
Term: 3 Years, with two 1-year extensions
Amortization: Interest Only
Loan-to-Cost: 76%
Repayment: Carve-Outs Only
Prepayment: 18 months
Loan Fee: 1.0% in / 0.25% exit