GSP successfully placed high leverage non-recourse debt on a Class B multifamily property in Denver. The Sponsor’s business plan includes renovation of the units and common areas, of which the lender will fund to 100% of cost. The three year term is priced at LIBOR + 6.25%, interest only for two years before rolling into a 25 year amortization schedule.
Challenge:The acquisition had a very short due diligence period and the seller provided minimal historical information on the property. A repayment guarantor was not available for this acquisition.
Solution:GSP used existing relationships and current knowledge of the lending market to quickly pinpoint a suitable capital source able to close the transaction in 25 days. This capital provider was able to focus on the Sponsor’s business plan and prior performance with similar deals when underwriting the transaction as opposed to on the property’s historical performance.
