Transaction Overview
George Smith Partners placed the refinanced of a mixed-use Los Angeles retail and affordable housing property. The multifamily component is 100% restricted affordable housing that coincides with a City sponsored 2nd Trust Deed. The City agreed to re-subordinate to the new financing but will remain a recorded instrument throughout the term of the loan. Most capital providers will not consider transactions with recorded seconds or permit ownership mezzanine debt at or post-close funding. The moderately leveraged asset is 100% leased and occupied but the retail component is light on national & regional credit and faces significant lease turn-over during the next two years. The Borrower required a 30 year due in 30 year self-liquidating loan to mitigate balloon event risk. The initial 10 year term is fixed at 5.0% (locked at application) before readjusting to 2.25% over the 10 year CMT. The prepayment steps-down from 5% and is open during the final five years of the fixed rate term.
