Non-Recourse Acquisition & Predevelopment Land Loan; Coastal Orange County, California

Rate: 7.90% Fixed
Term: 12 Months
Amortization: Interest Only
Loan to Value: 60%
Lender Fee: 1.00%
Prepayment: Open Full Term
Guarantee: Non-Recourse

Transaction Description:

GSP arranged the $1,350,000 non-recourse first mortgage from a REIT to acquire two separate Target shadow-anchored outparcels totaling just over one acre. The Lender was comfortable with providing the acquisition financing due to the Borrower having previously entitled the land for a multi-tenant retail pad during the Borrower’s option period to purchase the land. The loan provides 12 months of bridge term while the Borrower pre-leases the project and finalizes construction drawings. Although the loan is non-recourse, the Lender did not require an appraisal or other third-party reports, nor did it require an interest or carry reserve although there is no in-place cash flow on either parcel. Sized to 60% of purchase price, the loan priced at 7.90% fixed for the 12-month loan duration.

Advisors

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    $4,550,000 Refinance for a Newly Constructed 10-Unit Los Angeles Multifamily Property; Los Angeles, CA

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    Transaction Description:

    George Smith Partners secured $4,550,000 to refinance a newly constructed 10-unit multifamily property in Los Angeles. The financing provided 65% LTV and is fixed at a rate of 3.80% for seven years. The Sponsor needed to begin the loan application process while the Property had only 5 out of 10 units leased. This eliminated Agency financing because they require a fully leased and stabilized property. GSP focused on Banks that would begin processing the loan while units were still being leased. The selected Capital Provider underwrote to the stabilized cash flow and simply required full occupancy before the loan closed. The Lender did not require any seasoning on the newly signed leases. Although the Capital Provider required a recourse guarantee at close, they stipulated that the loan would convert to non-recourse after one year of stabilized operations. A 60-day rate lock was signed at application and the Sponsor was able to lock in a low 7-year rate. The original close date was delayed because the Sponsor was waiting on the full certificate of occupancy from the City. The Capital Provider extended the rate lock with no charge and closed the loan upon receiving the C of O.

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    Transaction Description:

    George Smith Partners secured $7,200,000 to refinance a 15-tenant retail center in Vista, CA. The Property, which was purchased by the Sponsor in 2016, was 30% occupied at acquisition. The Sponsor spent the last 3 years repositioning the center and leasing the vacant space to a diverse tenant mix of local businesses. The center is now 100% occupied and is anchored by a local grocer and a national bank. With the original business plan completed, there was a question of whether to sell or hold the asset.

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    Transaction Description:
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  • Expand

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    Transaction Description:

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