Transaction Overview
George Smith Partners arranged $84,000,000 in non-recourse, bridge financing for the completion and stabilization of a 270-unit, 885-bed student housing complex in Merced, CA. The new loan, which replaced a higher cost construction loan, was consummated, and closed prior to the City issuing the final certificate of occupancy. This is the first completed student housing project in Merced and is uniquely positioned to serve the growing enrollment of both UC Merced and Merced City College. The Project faced significant challenges due to the global COVID pandemic which caused cost overruns and setbacks due to labor and material shortages. The 80% leverage loan will provide the capital required to complete the Project, lease up and season the Property, and allow the Sponsor to repatriate excess equity. Additionally, the development included the use of EB-5 equity which some capital providers are hesitant to work with. GSP worked with several reliable, patient, and open-minded lenders who understood the unique risks and opportunities in the market and ownership structure which resulted in a lower cost to the Sponsor.
