Transaction Overview
Shahin Yazdi successfully refinanced the debt on a 1) 2003 Garden-Style, 144-unit multifamily property in Charlotte, North Carolina and 2) a 232-unit West Coast rental community in a secondary market. The two non-recourse senior loans stand-alone and are not cross-collateralized. The notes at $7,500,000 and $6,800,000 respectively, represent 75.4% loan-to-value. The ten-year term loan is fixed SWAPs plus 2.21%.
Challenge: In spite of the high LTV, the Borrower was intent on not having a cash management account and required that legal fees be capped prior to review of loan documents. The appraisal came in below the expected value and underwritten net cash flow did not support the debt coverage threshold.
Solution: The Bank agreed to a soft-lock box with a “trigger event” (ie; default or BK) for the cash management system to be engaged. GSP negotiated a legal fee cap based on recent loan documents negotiated by the Borrower for a separate capital provider. Credit committee agreed to increase the LTV constraint to 75.4% and underwrote pro-forma revenue based on the current in-place rent roll versus the trailing 12 month collections to meet the debt coverage requirement. Rate: 10-Year SWAP+2.21% Term: 10 Years Amort: 30 Years LTV: 75.4% Non-recourse Advisor: Shahin Yazdi
