Blended Rate: 7.97%
Term: 12-month Bridge Loan plus a one 6-month extension
Loan-to-purchase: 80%
Prepayment Penalty: None
Transaction Description:
The Sponsor had the opportunity to purchase a well-located property in Koreatown well below the market value because of the sponsor ability to close quickly with the 80% LTC quick-close loan. With the global pandemic, the property had 2 vacancies and a few non-paying residents. Because of the quick timing and the short-term distress in the cashflow, the Property would not qualify for bank or agency financing at this time. The sales broker and the Sponsor approached George Smith Partners for highly leveraged, quick purchase financing. GSP arranged a $2,695,000 non-recourse acquisition loan for the 16-unit apartment project. Despite marketing this deal during the global pandemic with vacancies and unpaying tenants, GSP successfully structured a first trust deed from a debt fund as well as a preferred equity B piece with a different investor to almost 80% of the purchase price. The non-recourse facility was priced at an interest-only fixed rate with a blended rate of 7.97% with a 12-month term plus a 6-month extension option. Thanks to our long-standing relationship with this debt fund and preferred equity investor, GSP was able to close this transaction in less than 10 days from signing the term sheet.
Related Financings
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$8,400,000 Non-Recourse Acquisition/Bridge Loan for a 50% Occupied Apartment Building; Hayward, CA
May 19, 2021
Transaction Description:
George Smith Partners identified a national balance sheet lender with an intimate knowledge of the Hayward submarket and arranged $8,400,000 in acquisition and bridge financing for the purchase and reposition of a currently 50% occupied, 1960’s-built apartment complex located in Hayward, CA. The Sponsor placed the portfolio under contract during the COVID-19 pandemic.
The loan includes $1,350,000 of future funding for extensive renovations of unit interiors and exterior upgrades, including an earthquake retrofit. Interest is not charged on the holdback until funds are drawn. This Capital Provider also structured and capitalized an interest reserve to cover the shortfall of cash flow during repositions. Sized to 76% of the total capitalization, the three-year bridge loan is interest only for 36 months and carries a floating rate of LIBOR + 4.25% and include two extension options for up to a term of five-years.
Rate: LIBOR + 4.25%
Term: 3 Years, with two 1-year extensions
Amortization: Interest Only
Loan-to-Cost: 76%
Repayment: Carve-Outs Only
Prepayment: 18 months
Loan Fee: 1.0% in / 0.25% exit -
$13,340,000 Acquisition/Bridge Loan for Six-Property Multifamily Portfolio; Long Beach, CA
November 18, 2020
Transaction Description:
George Smith Partners identified a national balance sheet lender with an intimate knowledge of the submarket and arranged $13,340,000 in acquisition/bridge financing for the purchase and reposition of a six-property multifamily portfolio located in Long Beach, CA. The Sponsor placed the portfolio under contract during the COVID-19 pandemic.
The loan includes a future funding component in which interest is not charged on the holdback until funds are drawn. This Capital Provider also structured and capitalized an interest reserve to cover the shortfall of cash flow during repositions. The three-year bridge loan is interest only for 36 months and carries a floating rate of LIBOR + 5.00% and includes two extension options for up to a term of five years. Our Sponsor’s business plan included a strategy to sell specific assets during the hold period as allowed for by the favorably structured release provisions.
Rate: LIBOR + 5.00%
Term: 3 Years
Amortization: Interest Only
Loan-to-Cost: 76%
Prepayment: 12 months
Loan Fee: 0.75% in / 0.75% exit
