Transaction Overview
George Smith Partners arranged $4,400,000 in permanent financing for the acquisition of a stabilized 19-unit multifamily property located in Los Angeles, CA. GSP was simultaneously helping the Sponsor close on a few multifamily refinances within their portfolio to pull cash out and use as equity for the Subject property. Although the Property is currently 100% occupied, rents were below market because the Seller self-managed and the Property needs exterior and interior improvements. The Sponsor wanted to lock in a low rate to allow for additional cashflow to be used towards building upgrades. Despite being on a strict closing deadline, GSP was able to identify a bank lender who could close within 45 days. The loan represents 70% of the purchase price and was structured with the first 5 years being fixed at 3.15%, while resetting every 5 years for the rest of the 30-year term. The loan structure also allows for flexible prepayment with the first 3 years being equal to 1.75% and 1% thereafter. The prepayment flexibility will allow the Sponsor to cash-out refinance once they have implemented their value-add strategy. The renovation plan will improve the Property appearance and support the overall business plan of increasing market rents and value. The new capital allows the Sponsor to expand their multi-family portfolio.
