Transaction Overview
George Smith Partners placed the cash-out refinance of a recently renovated 10-unit Long Beach multifamily property. This asset was acquired less than 18 months prior to our Sponsor initiating a $1,000,000 ($100,000 per unit) reposition of the property. These upgrades allowed the complex to be re-leased at market rate rental terms. Our take-out capital, a local regional bank, acknowledged the tremendous value-add and sized to market rather than the Sponsors’ capitalization. Sized to 65% of “As Is” value and a 1.25 DCR, proceeds returned most of the cash equity invested. Our DCR was measured against the actual annualized rent roll at close although relied upon proforma operating expenses due to the recent reposition and lease-up. This permanent loan is fixed at 3.15% and is full-term interest only for the three years. A five-year term was also offered under the same rate although our Sponsor opted for a 1,1,1 prepayment schedule rather than the more expensive five-year option.
