Transaction Overview
George Smith Partners secured a $4,500,000 refinance for a 13,051 SF mixed-use property in West Hollywood. The loan is fixed at a rate of 3.92% for a 5-year term. At close, the Property had four month-to-month leases in place, plus two cell tower leases. This was problematic since some lenders would not include MTM income or cell tower income in their underwritten cash flow. Although several lenders offered a competitive interest rate, they used a high stress rate when applying their debt coverage ratio constraint. As a result, most lenders quoted proceeds of less than 45% LTV.
The selected lender was able to mitigate the impact of these challenges by using a lower stress rate, giving full credit for MTM leases and including the cell tower income. As a result, they were able to provide proceeds of 50% LTV at a fixed rate under 4%.
