Rate: 4.80% fixed for 5-years
Term: 30 Years
Amortization: 30 Years
Recourse: Full Recourse
Prepayment Penalty: 3/2/1
Lender Fee: Par
George Smith Partners arranged permanent financing for a 6-unit multi-family property in Santa Monica, CA. Despite the property’s spectacular location, footsteps from Santa Monica College, the property was operating well below market rents. GSP identified a lender that was willing to rely solely on the Sponsors strong global cash flow, perfect credit history and experience managing and owning multi-family and commercial properties to size the loan down to a 1.01x DCR. Most conventional lenders require a minimum 1.15x DCR on their multi-family loans and could not reach the loan dollars needed for this transaction. Using its long standing relationship with the lender, George Smith Partners mitigated the below market rents by stressing the strength and experience of the Sponsor with a portfolio bank and obtained fixed-rate leverage at maximum loan proceeds.
October 23, 2019
George Smith Partners successfully secured a $4,100,000 non-recourse permanent refinance of a 14-unit, multifamily property in West Los Angeles. Loan proceeds were used to pay off the existing variable, higher interest rate bridge loan into a lower interest, fixed rate loan. There was significant cash-out to the Sponsor, who had recently completed an extensive reposition and upgrade of the Property. Due to the Sponsor’s business plan, flexibility and interest only were paramount. As such, GSP worked with the Lender to structure a 5-year fixed rate term with 3 years interest only and a step-down prepayment structure of 3%, 2%, 1%. This structure allows the Sponsor to maximize current cash flow while providing the flexibility of a step-down structure that burns off when the loan begins to amortize.
Term: 30 years; 5 years fixed then converts to floating rate at Libor + 2.25%
Amortization: 3 Years Interest Only then 30 year amortization
Minimum DSCR: 1.20x
Prepayment: Stepdown, 3%, 2%, 1%, open
October 16, 2019
George Smith Partners secured $7,800,000 for the cash-out, refinance of a newly renovated, class B, 246-unit multifamily building located in Indianapolis. The structure allowed the Sponsor to pull out over $2,000,000 in cash and leave in place an affordable grant loan that was awarded to the Property for maintaining a certain number of affordable units.
The Sponsor is a regional multifamily owner who has a strong relationship with an international bank. The in-place loan was originated by the Sponsor’s relationship bank. There were only three months of results after renovations. Due to the lack of results, the current Lender’s proposed offer to refinance the Property did not give the Sponsor credit for the upgrades and increased rents. It also would have required the payoff of an attractive loan from the City.
GSP identified a national balance sheet lender that understood the strength of the asset, improvements and experience of the Sponsor. Using our vast experience in understanding this type of asset and proving out the large future increases in cash flow, GSP was able to secure financing that was far superior and allowed for cash-out to the Sponsor. The financing also allowed for the affordable grant loan to remain in place. GSP was able to negotiate no lender fees or prepayment. The loan GSP secured allowed for higher proceeds, cash out, longer term, and an overall lower cost.