Transaction Overview
George Smith Partners secured $4,550,000 to refinance a newly constructed 10-unit multifamily property in Los Angeles. The financing provided 65% LTV and is fixed at a rate of 3.80% for seven years. The Sponsor needed to begin the loan application process while the Property had only 5 out of 10 units leased. This eliminated Agency financing because they require a fully leased and stabilized property. GSP focused on Banks that would begin processing the loan while units were still being leased. The selected Capital Provider underwrote to the stabilized cash flow and simply required full occupancy before the loan closed. The Lender did not require any seasoning on the newly signed leases. Although the Capital Provider required a recourse guarantee at close, they stipulated that the loan would convert to non-recourse after one year of stabilized operations. A 60-day rate lock was signed at application and the Sponsor was able to lock in a low 7-year rate. The original close date was delayed because the Sponsor was waiting on the full certificate of occupancy from the City. The Capital Provider extended the rate lock with no charge and closed the loan upon receiving the C of O.
