Multifamily

In a demonstration of organized chaos, GSP AVP Jason Gaffner successfully placed 5 separate multifamily loans on 5 unrelated multifamily assets for the same borrower. The portfolio consisted of 121 units located across the San Fernando Valley. The non-recourse loans allowed the sponsor to reduce his cost of carry by over 200 basis-points, while obtaining a small return of equity. Each standalone transaction is fixed for 5 years at 3.85% prior to floating for the remaining 10 year term. The loans are sized to a 1.20 DCR and 70% LTV. Challenge: After LOI execution, the Sponsor chose to diversify his long-term floating rate risk. The non-crossing of the transactions required the processing of five separate loans, mandating duplication and logistic controls. Solution: As an accommodation to the borrower, GSP successfully negotiated a blend of LIBOR and CMT-based ARMs for each of the five transactions. There was no rate add-on for this additional complexity. GSP worked diligently in communicating lender and 3rd party vendor needs with the borrower. The open lines and constant updates kept all parties informed throughout the due diligence period.