Multifamily

GSP successfully arranged the $1,230,000 cash-out refinance of a Playa Del Rey multifamily. The loan is fixed for 7 years before floating at 2.25% + 6 Month LIBOR for the remaining 30 year term. There is no balloon risk and the pre-payment penalty drops to zero after the 4th year. Challenge: The Borrower requested maximum proceeds, typically limited to 65% to 70% of value when pulling equity out. The relative small size of the asset reduced interest from many of the more traditionally aggressively priced capital sources. Solution_:_ GSP highlighted the location of the collateral, and provided the Lender with comparable values to further warrant the higher 75% LTV with the cash-out request. Future debt opportunities with this Sponsor and his strong real estate track record justified the sub-4.0% pricing despite the property’s size and substantial return of equity.