Multifamily

George Smith Partners arranged the ground-up construction financing for a 220-unit luxury multifamily project to 85% of the total capitalization. This shovel-ready project is designed to focus on tenant amenities that are superior to those in the competitive set; including a 2,000 square foot salt-water pool, dog parks, 4,500 square foot fitness center/yoga studio, and a 12,000 square foot community center. Onsite and offsite resident events will be incorporated to further distinguish the property from other Class “A” offerings. Tranched as an A and B piece, the loans consist of a $24,900,000 senior loan to 65% of cost along with $7,600,000 of Preferred Equity for an additional 20% of leverage. Both loans are non-recourse beyond a completion guarantee. Senior debt is priced at LIBOR + 4.75% with the Preferred Equity bringing the blended cost of capital to 7.42%. Challenge: There has not been any new construction of this quality in this market since 2007. The need to verify demand for high-quality, high-amenity residential product at the proforma rents proved challenging. Our Sponsor required a leverage point above what is typically offered by a single financing source. Solution: Substantial market research was conducted to support the economic and demographic fundamentals for the area. A younger populous with ample disposable income requiring supported amenities was gravitating towards this market. A strong development team along with low market vacancy and accelerated hiring velocity in local employment sectors were major contributors to the narrative.