Multifamily

George Smith Partners arranged the cash-out refinancing of a 153 unit multi-family property in a major mid-western MSA. The property is 96% occupied with a history of maintaining +90% occupancy. The Borrower intends to use surplus proceeds for the acquisition of another investment property. The subject is located at the epicenter of a revitalization of a 1.5 square mile downtown redevelopment where a private investor has committed to investing $350,000,000 in what is known as the “Downtown Project.” Amortized over 30 years, the 10 year term is fixed at 5.0% yet does not carry a pre-payment penalty. Challenge: Although the “Downtown Project” will invest $200,000,000 in real estate, $50,000,000 in small businesses, $50,000,000 in education, $50,000,000 in tech start-ups and will created almost 500 new jobs; this MSA is still viewed by most lenders as slow to recover. Due to a lack of multifamily sales in this market, there was concern as to the appraised value for the subject. Solution: GSP identified a portfolio capital provider not currently vested in this market who understood the “ground floor” opportunity to be part of this renaissance. The lender was willing to maximize the cash-out proceeds to 70% of appraised value. The deal team supplied out-of-market but current and relevant sales information to the appraiser to support the valuation.