Transaction Overview
George Smith Partners arranged $9,425,000 in financing for the refinance of a stabilized 40-unit property located in Los Angeles, California. The loan is fixed at a rate of 3.25% for 10 years. The loan was a takeout of the acquisition loan that GSP closed five years earlier. Over the course of their ownership, the Sponsor performed a complete renovation of the property which included adding additional units. The loan provided a significant amount of cash out. It was closed with a regional bank and includes 10 years of Interest Only payments. Full term IO is rare for a bank loan and is more often found with CMBS loans, which have an expensive prepay structure. In this case, the bank’s declining prepay will allow the borrower flexibility to sell or refinance again depending on market conditions.
