California

George Smith Partners successfully placed the refinance of a stabilized multifamily portfolio in West Los Angeles, California. The Borrower received 5 years of interest only at 4.35% with a 10 year term. The loan will float over 30-day LIBOR, amortized over 30 years during the 2nd five year period of the term. Challenge: The Sponsor engaged George Smith Partners to obtain a higher leveraged alternative to the Borrower’s primary banking relationship. Many lenders have constrained their interest-only loans by underwriting with hyper-amortization after the IO period or limiting the loan to value. Cash-out transactions typically do not qualify for any interest only amortization. The Borrower required the lowest rate for a fully-leveraged, interest-only program. The Sponsor also required that only one member who carries a minority interest personally guarantee the loan. Solution: GSP was successful in leveraging the strength of the Borrower’s recourse to obtain the exact terms requested. The Lender was able to approve the loan on the strength of the minority managing member. The loan was locked at application, and the lender honored all of the terms that had been negotiated.