Multifamily

GSP refinanced a newly renovated West Hollywood apartment building as the asset obtained occupancy stabilization. Pricing is fixed for three-years at 4.24%, prior to floating at 315 basis-points over 6-month LIBOR. The Loan self-liquidates and amortizes over 30 years. Challenge: The Property had gone into maturity default with the prior lender, resulting in a brief forbearance period. The Loan Guarantor had created numerous family trusts and other entities for estate purposes, adding complexity to the underwriting and closing process, particularly for a small bank used to financing smaller less-sophisticated borrowers. The Guarantor had provided a preferred equity investment to the Borrowing Entity through an LLC, further complicating the underwriting and closing documentation. The Borrower required a return of their trapped equity despite the current loan default. Solution: The newly renovated property and desirable location obtained 100% occupancy immediately after renovation. The Guarantor proved a net worth far in excess of the loan amount. The Lender became comfortable with the Borrower structural issues with the extensive documentation GSP provided. All third party reports were ordered on a “rush” basis to minimize the forbearance period. Based on GSP underwriting, the Lender was comfortable cashing-out up to 20% of the Borrower’s equity.