Transaction Overview
George Smith Partners secured a $6,086,000 non-recourse refinance loan for a 43-unit multifamily property in the greater Seattle area. The loan provided 70% leverage and is fixed at 4.04% for ten years. The collateral for the new loan excluded a free-standing building that was part of the original purchase, which gives the Owners an option to redevelop that parcel. Over the past several years, the Borrower has completely renovated the exterior of the Property and turned about one quarter of the units. The Lender gave the Borrower maximum credit for the higher rents on the newly refurbished units without requiring any seasoning. Additionally, the Lender did not apply a loan-to-cost constraint, which allowed the Borrower to receive a significant amount of cash-out from the refinance. The Lender also provided 5 years of Interest Only payments. Net operating income was underwritten at the actual note rate, resulting in higher proceeds than what other lenders were offering. The loan closed on the same day that the prepay on the existing loan dropped to 0%.
