Bozeman, MT Land Development Loan for 400 Unit Project

Transaction Description:

George Smith Partners successfully placed $6,800,000 in land financing for a 5-acre site to be developed into 42 single family detached homes in Los Angeles, CA. The Project had already received most entitlements for the infill, hilltop site located in an up-and-coming neighborhood. Furthermore, the Sponsor needed to pay off multiple loan balances and receive additional funding to complete engineering to receive a final map.
Backed by experienced Sponsorship with extremely well-located collateral, GSP sourced financing that funded at approval of tentative map with highly favorable leverage and a closing timeline of less than three weeks.

Transaction Description:

George Smith Partners arranged $3,800,000 (73% LTC) in non-recourse, bridge financing for the acquisition of two parcels of industrial zoned land in Mesa, Arizona. The Sponsors will develop the land into four multi-tenant, speculative industrial buildings catering to small and mid-sized industrial tenants.

With two weeks remaining in the escrow period, and with the Sponsor’s wish to arrange a non-recourse, high leverage land loan, GSP sourced a lender who was comfortable with the value and was able to close in 8 days while giving credit to the lift of the land’s appreciation during the seller’s escrow period. The loan resulted in 73% loan to cost, which is much higher than standard market leverage. Furthermore, the Lender was willing to go even higher at 78% LTC, but the Sponsors ultimately did not end up needing that much leverage.

Transaction Description:

George Smith Partners arranged $5,340,000 in a pre-entitlement land development loan for a proposed 226-unit affordable housing project in California. The 60% loan to acquisition is priced at 4.50% over LIBOR (with a 5.50% floor) interest only. The Sponsor is addressing a major need for affordable housing in the state. GSP secured a unique capital source to arrange favorable and flexible capital that met with the Sponsor’s timeline. The interest-only land loan was priced at 5.50%, with an 18-month term and one 6-month extension option. There is additional flexibility with the loan structure having no prepayment penalty. Despite dealing with a strict closing deadline on the purchase, GSP was able to identify a lender who could execute on terms and close within the purchase agreement.

Transaction Description:

George Smith Partners arranged $5,880,000 in acquisition land financing for a 18,000 SF vacant lot to be developed into 82 workforce housing units located in the Koreatown area of Los Angeles, CA. The Sponsor is addressing the need for workforce housing in this area of Los Angeles. There is a gap between high housing prices/rent and employee household incomes. This is creating a shortage of affordable housing. The loan represents 75% of the purchase price and is structured with a holdback feature to cover the predevelopment soft costs to bring the Project to permit-ready status. The interest-only land loan was priced at 5.50%, with an 18-month term and one 6-month extension option. The extension option gives flexibility to the Sponsor should they be unable to pull permits within 18 months. There’s additional flexibility with the loan structure because there is no prepayment penalty. Amid market uncertainty, GSP was able to leverage their network to identify land lenders who could provide certainty of execution. Despite being on a strict closing deadline, GSP was able to identify a lender who could close within the required deadline.

Transaction Description:

George Smith Partners secured $16,500,000 in bridge financing for a five-parcel land portfolio located in Los Angeles, CA. The five individual parcels are entitled (one in process of entitlements) for co-living developments totaling 211 units and 879 beds. The non-recourse loan refinanced existing debt, while providing for permitting and carry costs prior to development, with four assets slated to break ground in early 2021, and the fifth in late 2022. The loan is sized at approximately 50% LTC on a 6.90% fixed rate, non-recourse, with a 12-month term. The loan did not require an interest reserve.

Given COVID related permitting delays and perceived impacts to the co-living product type brought by the pandemic, GSP was able to identify a lender that understood the stability of the submarkets for future development and the resilience and growth of co-living over the next several years. The infill development sites, and high-density entitlements provide strong value to the collateral base for this financing. The loan closed within five weeks of term sheet execution (including the holiday and New Year’s break).

Transaction Description:

George Smith Partners arranged $12,500,000 in non-recourse financing for the acquisition of land which the Sponsor will entitle for 333 apartment units. GSP was able to locate a lender able to provide 85% of the purchase price. Not only was the loan high-leverage, it had no holdbacks for pre-development costs, making servicing very simple for the Borrower. The Sponsor intends to complete the entitlements and refinance into a construction loan in 6-12 months.