Gap Equity – 6 Day Close

Transaction Description:

George Smith Partners has achieved a successful negotiation of a Programmatic Joint Venture Equity Structure amounting to $5,300,000. This arrangement will fund two affordable multifamily developments in The District of Columbia, involving the renovation of 25 existing units and the construction of 87 new ground-up units.

In a climate of increasing interest rates, and with a considerable number of LP equity groups staying on the sidelines, the team and Sponsor faced challenges in finding an LP partner willing to invest in a single development with a satisfactory rate of return. Despite considering the option of utilizing wealthy family funds for a swift closing, the decision regarding the funding source remained unresolved.

GSP successfully negotiated a programmatic equity arrangement that offers both investors enhanced returns over an extended duration. As a result, the sponsor secured a long-term equity provider for their forthcoming projects, while the equity provider gains the opportunity to access the sponsor’s extensive pipeline, enabling potential future funding returns.

Transaction Description:

George Smith Partners placed a $32,000,000 construction loan and $9,000,000 of LP Equity for a for-sale residential project in Hayward, California with a repeat sponsor. This Project will have 55 townhomes providing much needed workforce housing to the area. The Project will also have some affordable units for sale.

GSP was able to combine efforts and execute an effective and in-depth marketing campaign to help the capital markets understand the opportunity appropriately while finding solutions to various challenges that arose during the entire process. GSP marketed and highlighted the Project’s strength, the phasing nature of the build schedule, the projected sales prices and the forecasted upward trajectory in both sales price growth and sales pace growth. GSP was able to source capital providers on the Project that were comfortable with both the depth and experience of the Sponsor as well as believe in the continued growth of the Bay Area.

Ultimately, the professionalism and expertise of GSP on coupled with the proficiency and extensive experience of the sponsor allowed for a successful close.

Transaction Description:

George Smith Partners placed a $45,000,000 construction loan and advised on $10,200,000 of LP equity for the first phase of a for-sale residential project in Silicon Valley, California with a repeat sponsor. The Project will be built in two phases. This first phase will have 50 townhomes providing much needed workforce housing to the area. The Project will also have some affordable units for sale.

GSP executed an effective and in-depth marketing campaign to help the capital markets understand the opportunity appropriately while finding solutions to various challenges that arose during the entire process. GSP marketed and highlighted the Project’s strength, the phasing nature of the build schedule, the projected sales prices and the forecasted upward trajectory in both sales price growth and sales pace growth. GSP was able to source capital providers on the Project that were comfortable with both the depth and experience of the Sponsor as well as believe in the continued growth of the Bay Area.

Ultimately, the professionalism and expertise of GSP on the deal coupled with the proficiency and extensive experience of the Sponsor allowed for a successful close.

Transaction Description:

George Smith Partners successfully placed $39,000,000 in construction debt and advised on $20,000,000 Limited Partner equity for the ground up construction of 137-unit mixed-use development with ground floor retail in Midtown Sacramento, CA. The Project is the second asset that GSP has structured both debt and equity for a sequence of planned multifamily developments. Pricing for the non-recourse construction loan tightened from the first transaction six months ago.

The site will be developed into a seven-story building consisting of six levels of rental units, parking, and ground floor retail. Situated in Midtown, Sacramento’s trendiest neighborhood, the Property is walking distance to restaurants, shops and is conveniently positioned near the rail station and a local highway. The area has increasingly attracted significant public and private investment due to its proximity to employment hubs and lifestyle amenities.

The capital markets were weary of ongoing supply chain and increasing construction costs. GSP worked with the Lender and equity investor to structure contingency levels that were acceptable to both. The Sponsor was provided with competitive, non-recourse construction loan and an investor that could grow with their future development needs.

Transaction Description:

As the leader in the rapidly emerging Single Family for Rent (SFR for Rent) and Build-to-Rent (BTR) multifamily asset classes, George Smith Partners worked with our client to structure an optimal structure for the development of the 130-unit project located in Fort Meyers, FL. Throughout the year-long engagement, GSP and the Sponsorship secured various investment structures including multiple Co-GP, LP, Pref, and Senior construction facilities, ultimately structuring a high leverage 70% recourse loan and a full equity structure of 80% LP + 20% Co-GP.

With the intention of securing platform participants, the chosen structure will allow for a rapid expansion of the portfolio on a favorable deal by deal basis. The Sponsorship plans to scale with their partners to an additional 600 units in the next 12 months to meet the rapidly growing need for housing across Florida. The platform investment will also provide the opportunity to grow into other high growth markets across the south and east coasts.