Transaction Overview
George Smith Partners secured $6,600,000 in proceeds for the refinance of two properties comprised of 28 units in Los Angeles. The loan is fixed at a rate of 3.35% for 5 years. The Borrowers had closed their previous loan during a cyclical peak in interest rates. With this refinance, they were able to lower their interest rate by over 1% and get 3 years of additional interest only payments.
The original loan application had a loan-to-value stipulation of 60%. Shortly after the loan went into application in August 2020, the Property experienced an increase in vacancy. Additionally, the appraised value reflected some temporary challenges in the market. Since this Property was part of a portfolio refinance, the Lender agreed to raise the LTV to 67% and provide additional time for occupancy to recover. Ultimately, the loan terms and rate were held for 8 months until the Property was fully leased up. Once stabilization was achieved, the Lender underwrote cash flow based on newly signed leases and closed within 2 weeks.
