Oregon

George Smith Partners successfully placed the $38,900,000 loan to take out a $6,000,000 bridge lender and provide ground-up construction financing for Phase 1 of a 373 unit, multifamily/marina development on Hayden Island in Portland, Oregon. Proceeds were used to retire the existing bridge loan (Davies – GSP FinFacts 12/12/12) required to satisfy creditors after the project stalled post-ground breaking. The marina is currently stabilized and operating while the loan will provide additional funds to develop 175 units of the two-phase project. The three year loan is sized to 65% of cost and only requires a repayment guarantee of the top 10% of the loan. This transaction represents the second marina GSP has placed in the last 12 months Challenge: Over the course of the Project’s lifecycle, the Borrower had encountered several issues, many of which made conventional financing improbable including (1) Seizure of initial construction loan syndication’s agent-bank by the FDIC; (2) Consequent lender-liability issues stemming from syndicate banks’ failure to fund construction loan proceeds (3) Chapter 11 bankruptcy-protection filing. Solution: Under time-pressure to repay the $6,000,000 bridge loan, GSP recognized the opportunity to take advantage of the high-yield financing programs in the private-equity markets to fund 100% of future costs-to-complete. Several factors made this approach possible: (1) Horizontal improvements and utilities were already in place; (2) Fully functioning, 95% occupied, 204-slip marina providing ample cash-flow for assistance with debt-service at funding. GSP demonstrated that the Borrower, through the course of the project, had invested approximately $20,000,000 to-date and was credited that amount – thus underwriting to a 65% LTC constraint.