Transaction Overview
George Smith Partners arranged $2,600,000 in permanent financing (70% LTV) for the refinance of a 16-unit multifamily property located in Los Angeles, CA. The Sponsor engaged GSP to assist them with the replacement of their existing, expensive, highly leveraged, quick close bridge lender that GSP had arranged in April for the acquisition of this Property. The Sponsor’s plan for this value-add Property was to raise the value through strategic property enhancements that will increase rental revenue. GSP was able to provide the Sponsor with a 5-year floating rate with a floor of 3.85%. The loan structure allows the Sponsor to refinance out of an expensive loan and start to recoup additional cash flow to use for interior and exterior renovations. There is no prepayment with this replacement capital allowing the Sponsor to recapitalize once his business plan is realized. The prepayment flexibility will allow the Sponsor to cash-out refinance once they have implemented their value-add strategy. The renovation plan will improve the Property appearance and support the overall business plan of increasing market rents and value. Due to GSP’ strong-standing relationship with this Lender, this transaction closed within 35 days from signing the term sheet and met the Sponsor’s deadline.
