Transaction Overview
George Smith Partners successfully placed the refinance a 154-unit Class-A multifamily community in Garland, Texas; a Dallas suburb. The Sponsor still had time remaining on his existing fixed rate loan, prior to the loan opening to prepayment without penalty. Believing interest rates were on the rise; our Sponsor weighed the benefits of re-committing to current historically low interest rates versus the off-set of paying the prepayment penalty. GSP conducted a sensitivity analysis for our Client that allowed him to measure what the cost of borrowing should rates bump up a quarter, half and three-quarters of a point. The rate was locked at application while his prepayment penalty amortized down during the due diligence period. Sized to 60% of value, a non-recourse 10-year fixed interest rate loan was locked and funded at 3.895%. A step-down prepayment penalty was structured at no additional cost.
