Transaction Overview
George Smith Partners placed 84.3% of purchase for the acquisition of a 23-unit Seattle multifamily built in 1915. This is inclusive of a 100% bank funded interest reserve. A six-month escrow allowed the seller to vacate units at lease-roll, netting a 48% occupancy at close. Our Sponsor, a foreign national, will vacate the remaining units while processing permits and execute a major rehabilitation of the property, including the addition of new rentable square footage. This rehab will be funded by a future construction loan and not this acquisition loan. To optimize pricing, two loans were structured in an A/B format where the A piece was funded by a regional bank and allowed the B piece to record a second Deed of Trust. The blended cost of capital calculates to 7.76% fixed for the initial 12-month term. Debt service is paid from a fully bank funded reserve account. A limited repayment guarantee was required from the Borrower. Closing executed two weeks from posting the application deposit, inclusive of a bank-ordered MAI appraisal and property condition inspection.
