High-Yield Take-Out

Transaction Description: George Smith Partners arranged the take-out financing of a high-yielding private money loan. Structured as an interest only bridge financing for a 70 unit apartment complex, the non-recourse loan is fixed at 5.81% for two years. Located in the Western US, the mid-1980’s vintage subject was over 95% occupied at funding. This financing replaced high-rate financing from a mid-2014 acquisition.

Challenge: The property’s operating history since acquisition had been inconsistent as the Borrower replaced an underperforming management company during his restructuring. The new management improved occupancy and collections but lacked stabilized history to qualify for an agency loan for an out of state Borrower.

Solution: GSP identified a non-recourse bridge lender provided an agency-to-perm option. The fixed rate loan is pre-payable after 12 months and will roll into a long-term agency execution once a stabilized track record is documented.