Transaction Overview
Steve Bram and David R. Pascale, Jr. arranged the $10,887,000 fixed rate portfolio loan for a 669-Unit Apartment Complex located in Los Angeles. The low-rise campus was built in the late 1940s with unit mixes of 1 and 2 bedroom configurations. Well located near the new Crenshaw light rail transit line and Baldwin Hills Crenshaw Plaza, the 65 building/40 parcel asset had not traded in 30 years prior to our Sponsor’s 2013 purchase. The acquisition financing and the supplemental financing are each structured as 2 separate loans. Sponsor has divided the property into 2 large multi-building properties, each with their own name/branding and separate leasing offices. Sponsor renovations include unit upgrades (new appliances, countertops, mirrors, finishes, faucets, plumbing, flooring including a mix of refinished hardwood floors and new carpets), new parking lots, improved landscaping, many new roofs, etc. This loan structure fits in with Sponsor’s strategy to acquire properties in improving sub-markets with long-term, fixed-rate debt and renovating units at unit turn without the future permanent loan rate risk. This non recourse, supplemental funding allows for equity recapture and funds to continue property improvements. GSP sourced the initial senior financing in late 2013 at 71% of purchase. This non-recourse supplemental funding was closed 19 months from the purchase and is fixed at 4.59% and will be co-terminus with the senior notes. The combined financings equal 89.25% of original purchase price.
