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Financings

  • $3,870,000 Cash-Out Permanent Financing Loan for 44-Unit, Multifamily Property; Los Angeles, CA

    March 16, 2022

    Transaction Description:

    George Smith Partners arranged $3,870,000 in cash-out permanent financing for the refinance of a 44-unit multifamily property located in Los Angeles, CA. GSP was able to time the refinance of the more expensive lender and lock the rate before the interest rate market started to move upwards. The recent improvements allowed the Sponsor to increase rents thus increasing the value of the Property. GSP was able to provide the Sponsor with a 10-year term, and the first 7 years being fixed at an incredibly low rate. The flexible prepayment structure is equal to 2% for the first 2 years, 1% for years 3 and 4, and 0% thereafter. The loan structure allows the Sponsor to refinance out of an expensive loan with a fixed rate of 3.15%, while also receiving cash out. The Sponsor is using cash-out proceeds to continue their business plan of purchasing and renovating additional properties.

    Rate: 3.15% (Fixed for 7 Years)
    Term: 30 Years
    LTV: 60%
    DCR: 1.20

  • $6,800,000 Non-Recourse Land Financing for a 5-Acre Site to be Developed into 42 Single Family Detached Homes, 75% LTC; Los Angeles, CA

    March 9, 2022

    Transaction Description:

    George Smith Partners successfully placed $6,800,000 in land financing for a 5-acre site to be developed into 42 single family detached homes in Los Angeles, CA. The Project had already received most entitlements for the infill, hilltop site located in an up-and-coming neighborhood. Furthermore, the Sponsor needed to pay off multiple loan balances and receive additional funding to complete engineering to receive a final map.
    Backed by experienced Sponsorship with extremely well-located collateral, GSP sourced financing that funded at approval of tentative map with highly favorable leverage and a closing timeline of less than three weeks.

    Term: 12 Months
    LTV: 75% Loan to Cost
    Guaranty: Non-Recourse

  • $9,425,000 Refinance Loan For 40-Unit Multifamily Property in Los Angeles, CA; 10 Years Fixed at 3.25%; Full Term Interest Only Payments

    March 9, 2022

    Transaction Description:

    George Smith Partners arranged $9,425,000 in financing for the refinance of a stabilized 40-unit property located in Los Angeles, California. The loan is fixed at a rate of 3.25% for 10 years. The loan was a takeout of the acquisition loan that GSP closed five years earlier. Over the course of their ownership, the Sponsor performed a complete renovation of the property which included adding additional units. The loan provided a significant amount of cash out. It was closed with a regional bank and includes 10 years of Interest Only payments. Full term IO is rare for a bank loan and is more often found with CMBS loans, which have an expensive prepay structure. In this case, the bank’s declining prepay will allow the borrower flexibility to sell or refinance again depending on market conditions.

    Rate: Fixed at 3.25% for 10 years
    Term: 10 years
    Amortization: Full Term Interest Only
    Prepayment Penalty: 5,5,4,3,2,1,1,1,1%
    Guaranty: Non-Recourse

  • $5,100,000 Non-Recourse, Cash-Out Refinance Loan For 20-Unit Multifamily Property; Los Angeles, CA

    March 1, 2022

    Transaction Description:

    George Smith Partners sourced a $5,100,000 loan for the refinance of a stabilized 20-unit property in West Los Angeles. The loan provided 65% leverage and is fixed at a rate of 3.15% for 3 years. The Borrower had achieved their value-add business plan and was able to get significant cash out from the refinance. Net operating income was underwritten at the actual note rate, which resulted in higher proceeds compared to other lenders. The rate of 3.15% was very competitive for a loan that provided full proceeds of 65% LTV. The declining prepay will allow the Borrower flexibility to sell or refinance again depending on market conditions.

    Rate: Fixed at 3.15% for 3 years then floating at CMT + 2.75%
    Term: 10 years
    Amortization: 3 years Interest Only followed by 30-year amortization
    Prepayment Penalty: 3,2,1,0%
    Guaranty: Non-Recourse

  • $6,650,000 Perm Financing for Single Family and Multifamily with ADU/JADU Portfolio; North Hollywood, CA

    March 1, 2022

    Transaction Description:

    George Smith Partners secured three separate loans totaling $6,650,000 for the permanent financing of a portfolio of three properties/15 units in North Hollywood, CA. The Properties were acquired-entitled and developed by the Sponsor to include a combination of multifamily, single-family-detached with ADUs and JADUs. The Properties are located within proximity to each other and were in various stages of lease-up and stabilization at the time of the financing.

    The recourse loan refinanced both equity and construction debt with perm financing with a total term of 10 years. The three separate loans represent 70% loan to stabilized value with a minimum 1.15:1.0 DSCR. The loan allows for open prepayment with yield maintenance.

    The Sponsor’s business plan provides for much needed housing and increased density developed under the AB-68 Land Use Act for Accessory Dwelling Units passed by Governor Newsom and the State of California in October 2019. GSP was able to secure a lender that was comfortable with the collateral which required varying ownership structures including a land trust as required for JADUs.

    Rate: 4.05% Fixed for 10 years
    Min DSCR: 1.15:1.0
    Loan Fee: 1%
    Term: 10 Years
    Amortization: 30 years
    Recourse: Recourse
    Prepayment: Yield maintenance

  • 14 Day Quick Close Acquisition Capital of $1,450,000 for 6 Acre Plot of Land

    February 23, 2022

    Transaction Description:

    George Smith Partners was engaged by the Sponsor to secure financing for six acres of raw land located in the Western States. The Sponsor plans on entitling the land to build out five, forty-unit multi-family buildings, with shared common areas in open air. The Sponsor also plans on building out a pad for a restaurant. Securing financing for unentitled raw land provided an exceptional challenge. Additionally, location, low loan amount, and lenders being more restricted due to COVID made it increasingly difficult to secure financing.

    Thanks to GSP’s vast lender network and strong relationships, GSP was able to secure attractive financing for this Project. Despite the hurdles, GSP secured 55% LTC financing at 9.25% interest-only, with a 24-month term and a 12-month extension option. GSP’s ability to secure this financing in just 10 business days allowed the Sponsor to renegotiate the purchase price and get a hefty discount.
    Today, most land lenders in the space are restricted to 40%-50% leverage. This high-leverage loan structure allows the Sponsor to start pre-development, including entitlements and pulling permits. The extension option gives flexibility to the Sponsor should they face delays in getting to entitlement due to COVID effects. There’s additional flexibility because there is no prepayment penalty. Thanks to our long-standing relationship with this debt fund, GSP was able to close this transaction in 14 days from receiving the request.

    Rate: 9.25%
    Term: 24-month Bridge Loan plus a one 12-month extension option
    LTC: 55%
    Prepayment Penalty: None

  • $3,925,000 Non-Recourse Acquisition Loan For 21 Unit Multifamily Property; Los Angeles, CA

    February 23, 2022

    Transaction Description:

    George Smith Partners sourced a $3,925,000 loan for the acquisition of a 21-unit property in West Los Angeles. The loan provided 65% leverage and is fixed at a rate of 3.15% for 3 years. The Lender gave the Borrower full credit for newly signed leases and was able to underwrite to the most recent month’s income. Net operating income was underwritten at the actual note rate, which resulted in higher proceeds compared to other lenders. The Property had some deferred maintenance, but the Lender was willing to have the borrowers complete it after closing. The 3-year declining prepay fit with the Borrower’s value-add business plan.

    Rate: 3.15%
    Term: 10 years
    Amortization: 3 years Interest Only followed by 30-year amortization
    Prepayment Penalty: 3,2,1,0%
    Guaranty: Non-Recourse

  • $4,800,000 Permanent Acquisition Financing of Industrial Park; Pflugerville, TX

    February 16, 2022

    Transaction Description:

    George Smith Partners arranged $4,800,000 in financing for the acquisition of a six-building, fully occupied industrial park in Pflugerville, Texas. The Sponsor, a repeat client, was selling another property in which the existing financing had a prepayment penalty. GSP leveraged its strong relationship with the lender of the Property being sold to successfully negotiate a reduction of the prepayment penalty by providing this Lender the opportunity to finance the purchase of the industrial park. The Lender offered a permanent, recourse loan at 3.68% fixed for the first five years based on the original property’s existing loan from 2019. The new loan term is ten years with a 30-year amortization.

    Rate: 3.68% Fixed for first five years
    Term: 10 Years
    Amortization: 30 Years
    LTC: 48%
    Guaranty: Recourse

  • $25,200,000 Construction Financing for a Mixed-Use, Luxury Multifamily Development; Downtown Culver City, Los Angeles

    February 16, 2022

    Transaction Description:

    George Smith Partners successfully arranged $25,200,000 in senior construction financing for a 54-unit ground-up luxury apartment community featuring 3,000 SF of ground floor retail space in the heart of Downtown Culver City. The Sponsorship Team acquired the Property in 2018, which is now fully entitled and ready to break ground. The Project is expected to deliver in Q4 of 2023.

    As a central and upcoming submarket of Los Angeles, Culver City is peppered with tech startups and major employers from Amazon to Apple, flourishing as an employment hub with over 250,000 high-paying jobs and approximately 8,000 employees within a mile from the Subject site. The best-in-class Sponsorship team has extensive local industry knowledge and recognized the Property’s underlying value, bolstered by the submarket’s immense growth and capital inflow, as well as the area’s historical roots in the movie and entertainment industry. GSP was able to identify a lender who offered highly competitive terms, given the Project’s significant demand and the value of multifamily housing in an ultra-high growth submarket.

    All Terms Confidential

  • $3,800,000, 73% LTC Land Loan for Multi-Tenant Spec Industrial; Mesa, AZ

    February 9, 2022

    Transaction Description:

    George Smith Partners arranged $3,800,000 (73% LTC) in non-recourse, bridge financing for the acquisition of two parcels of industrial zoned land in Mesa, Arizona. The Sponsors will develop the land into four multi-tenant, speculative industrial buildings catering to small and mid-sized industrial tenants.

    With two weeks remaining in the escrow period, and with the Sponsor’s wish to arrange a non-recourse, high leverage land loan, GSP sourced a lender who was comfortable with the value and was able to close in 8 days while giving credit to the lift of the land’s appreciation during the seller’s escrow period. The loan resulted in 73% loan to cost, which is much higher than standard market leverage. Furthermore, the Lender was willing to go even higher at 78% LTC, but the Sponsors ultimately did not end up needing that much leverage.

    All Terms Confidential

  • $21,250,000 Construction to Perm Multifamily Financing; Los Angeles, CA

    February 9, 2022

    Transaction Description:

    George Smith Partners secured a $21,250,000 construction-to-bridge loan for a new 52-unit high-end multifamily community located in West Los Angeles on a busy prominent corner. The recourse loan will fund construction and transition into a perm loan with a total term of 10 years. The all-in-one loan represents 60% loan to stabilized value and 70% loan to cost and is structured with a 3-year (+ 6-month extension) interest-only period. The loan allows for open prepayment after year 4 without penalty. Prior to, the prepayment penalty is 2% in years 1 and 2 and 1% for years 3 and 4.

    The site is comprised of 5 legal parcels assembled by the Borrower beginning in 2011 through 2015. The proposed Project will consist of 51 residential units and one ground floor retail unit in a Type III, 5-story building with two levels of subterranean parking for 72 cars utilizing a state-of-the-art automated parking system. The proposed unit mix includes studio, 1, 2 and penthouse units as well as 5 live/work units and 4 affordable rent restricted units. Penthouse units include unique/large, covered terraces as well as roof top decks with expansive skyline views.

    GSP was able to secure a lender that underwrote to the proforma stabilized NOI despite the challenges faced during the pandemic especially with higher-end product.

    Rate: 3.6% Floor Fixed for 7 years then 12MAT + 2.75%.
    Term: 10 Years
    Amortization: Interest Only for 36 months with a 6-month extension.
    Guaranty: Recourse
    Min DSCR on Perm: 1.15:1.0
    Loan Fee: 1%
    Prepayment: 2%, 2%, 1%, 1% Years 1-4

  • 75% LTC Construction Loan for 19-Unit Apartment Building; Los Angeles, CA

    February 2, 2022

    Transaction Description:

    George Smith Partners secured $4,600,000 of senior construction financing for the development of a 19-unit ground-up multifamily building in Los Angeles, California. The construction loan floats at a rate of Prime + 1%. The 75% loan-to-cost construction loan also comes with the option to convert to a 5-year mini-perm loan upon completion based on the 5-year Treasury plus a margin of 2.25%, with a 3.50% floor, eliminating any future financial risks. GSP sourced a lender that was able to move efficiently and most importantly accommodate the Borrower’s development timeline and experience.

    Rate: Prime +1%, with a floor of 5%
    Construction Term: 18 months + 6-month option to extend
    Mini-perm Option: 5-year treasury + 2.25% with a 3.50% floor
    LTC: 75%
    Guaranty: Recourse