Acquisition Financing of a 50% Vacant Multifamily Property; 4.25% Rate, 35 Day Close; Los Angeles, CA

  • Rate: Prime + 0.25% w/ floor of 3.75%
  • Term: 5 Years
  • Amortization: First 2 Years Interest-Only
  • LTPP: 75%
  • DCR: 1.10x
  • Prepayment: None

Transaction Description:

George Smith Partners arranged bridge-to-perm financing for the acquisition of a multifamily property located in the Beverly Grove area of Los Angeles, California. The Property was 50% vacant and in need of renovation at the time of close. GSP matched the Sponsor with a lender who could provide the flexibility of a bridge-to-perm loan with a 5-year term, of which the first 24 months would be interest-only to account for the renovation and lease-up period.

Despite today’s high-interest rate market, GSP was able to secure a floating rate at PRIME + 0.25% (4.25% as of today). The market usually caps this kind of structure with a below-market rate at 65%-70% LTV, but GSP was able to leverage its relationships to secure 75% of the purchase price for the Sponsor. The loan has no prepayment penalty, allowing for additional flexibility for the Sponsor. The Borrower was in a 1031 exchange and only had 45 days to close from the time the deal was brought to GSP. GSP quickly identified a bank lender, entered into application, and closed the transaction in just 35 days.

  • Rate: Prime + 0.25% w/ floor of 3.75%
  • Term: 5 Years
  • Amortization: First 2 Years Interest-Only
  • LTPP: 75%
  • DCR: 1.10x
  • Prepayment: None

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