California

Shahin Yazdi placed the 70% of purchase acquisition loan on mixed-use, brick building in the mid-Wilshire district of Los Angeles. The $7,444,500 loan is fixed for seven years at 4.25% and offers a step-down prepayment penalty. There is no balloon date as the loan will self-liquidate over its’ 30 year term. Challenge: The Borrower did not currently own any other Multi-Family assets. Property inspections uncovered significant deferred maintenance. The acquisition required a year-end close with only 40 days for due diligence including Thanksgiving, Christmas and New Years’. The loan request per unit was high for a typical brick asset. Brick buildings are not looked at favorably in California. Solution: The lender agreed to focus on the management team hired to operate the day-to-day activities in order to augment the Borrowers’ lack of real estate experience. A life/safety reserve account was added to the loan structure to address deferred repair items. An extensive remodel business plan added comfort to the underwriters’ maintenance concerns. GSP was able to facilitate a rushed on all 3rd party reports despite the holidays meet the loan closing timeline. The historic/unique style and structure of the building that offered off-street parking supported the loan value. The building had been retrofitted with shear walls/lateral beams for further earthquake resistance.