Utah

GSP arranged acquisition debt financing for a 1980’s vintage, 96 unit under-managed apartment community in West Valley, Utah. The Southern California based Borrower requested $5,000,000 in immediate funding for the purchase and an additional $500,000 in reserves to cover renovation costs and capital improvements. Challenge: The Borrower required high leverage non-recourse financing with a flexible prepayment schedule to execute a renovate-and-flip business plan to achieve required fund returns. The combination of the loan size coupled with a non-recourse, flexible prepayment structure and 90% total loan to contract purchase price significantly narrowed the potential lending pool. Solution: GSP leveraged existing capital relationships to structure a sub-6% coupon to 75% of total cost. Future draws are provided as reimbursement for work completed (no interest on future funds until disbursement and no performance hurdles). GSP also structured a minimal yield maintenance period. Extensive knowledge of the lender’s due diligence process led to a streamlined period of approximately 30 days from signed term sheet to closing, allowing the borrower to close comfortably in advance of the property acquisition deadline.