Transaction Overview
George Smith Partners secured $38,500,000 for the recourse, cash-out refinance of a 950-unit multifamily building located just outside of Cleveland, Ohio. The waterfront building is situated in one of the best suburbs. The Sponsor purchased the building about 12 months ago with large vacancies and completely renovated and rehabbed the Property.
Challenges:
With the successful renovation plan making progress, the Property was leased from 30% to just above 70% occupancy. Most lenders require 90% occupancy for 90 days to qualify for long-term fixed-rate financing. The Property’s current bridge loan had a floating rate that was increasing as both short-term and long-term rates increased in today’s challenging environment.
Solution:
With GSP’s help, the Sponsor utilized a detailed lease-up business plan which allowed the Lender to understand the strength of the asset, location, and experience of the Sponsor. GSP originated a permanent loan for this 72% leased property and the Lender was able to underwrite to in-place income and allow for low-cost, 5-year financing at a below market rate with no prepayment penalty.
