Term: 18 Months, One 6 Month Extension
George Smith Partners arranged $5,880,000 in acquisition land financing for a 18,000 SF vacant lot to be developed into 82 workforce housing units located in the Koreatown area of Los Angeles, CA. The Sponsor is addressing the need for workforce housing in this area of Los Angeles. There is a gap between high housing prices/rent and employee household incomes. This is creating a shortage of affordable housing. The loan represents 75% of the purchase price and is structured with a holdback feature to cover the predevelopment soft costs to bring the Project to permit-ready status. The interest-only land loan was priced at 5.50%, with an 18-month term and one 6-month extension option. The extension option gives flexibility to the Sponsor should they be unable to pull permits within 18 months. There’s additional flexibility with the loan structure because there is no prepayment penalty. Amid market uncertainty, GSP was able to leverage their network to identify land lenders who could provide certainty of execution. Despite being on a strict closing deadline, GSP was able to identify a lender who could close within the required deadline.
Assistant Vice President
- No related financings.