Rate: 3.96% Fixed for 10 years
Term: 10 years
Amortization: Interest Only
Prepayment Penalty: Yield Maintenance
DCR: 1.55x
Guaranty: Non-Recourse
Origination Fees: Par

Transaction Description:
George Smith Partners secured $25,250,000 for the non-recourse cash-out refinance of a newly constructed, ultra-luxury 49-unit multifamily building located in Los Angeles (Brentwood). The Building is situated in one of the most sought after areas and is in close proximity to popular restaurants, bars and entertainment. The construction take-out permanent loan is fixed at 3.96% for ten years with full term interest only and has a yield maintenance prepayment penalty structure.

Challenges:
The Building was in the final lease up stage when the financing process started and final Certificate of Occupancy had not yet been delivered. The Building also contains four affordable units, which were the last units to be leased up, due to the City’s application certification process. Thus the owner did not have any seasoning on the newly leased units nor any historical operating expenses.

Solution:
GSP identified a capital source that understood the strength of the asset, location and the experience of the Sponsor (Developer). Based on these strengths, the Lender was able to underwrite to in-place income without seasoning and proforma operating expenses, which maximized loan proceeds. The Lender was able to fund once the Property was 95% leased and final Certificate of Occupancy issued. The Sponsor locked a full term interest only structure, which is advantageous to the Property’s cash flow as the new leases begin to season.

Advisors

Matthew Kirisits Director

Rate: 4.57% fixed
Term: 10 years
Amortization: 25 years
Loan to Cost: 91.1%
Guaranty: Recourse
Lender Origination Fee: None

Transaction Description:

George Smith Partners arranged $8,740,000 of acquisition financing for an owner user retail property in Los Angeles. The Sponsor had been introduced to GSP after they received a loan cancellation from their direct bank. GSP jumped into the loan process right away and worked with the Sponsor, their CDC and the new Lender in order to ensure closing in a timely matter.  The selected Lender that GSP brought in was able to give the Sponsor a much more aggressive interest rate than their direct lender had promised in their LOI. This ended up saving the Sponsor 67 bps on the interest rate and over $240,000 in interest during the first 10 years of the loan.

Rate: 5.05 % – 30 Day Libor+ 255bps – No Rate CAP Required
Term: 2 Years
Prepayment Penalty: None
Lender Origination Fee: 1%

Transaction Description:

GSP recently arranged a $6,500,000 bridge loan on a vacant 30-unit apartment community near the Los Angeles CBD. The Property had structural issues and was red tagged by the City. The owner took the 1913 building down to the studs and completely rebuilt the Property. In order to reduce cost and finalize construction, the ownership requested bridge financing.

With no cash flow and no signed leases several lenders were concerned about repayment. Using GSP’s relationships and market expertise we were able to place a Libor floating rate bridge loan. This financing provided the Sponsor the ability to payoff of the current loan. In addition, there was enough capital left over for completion construction and an interest reserve for lease-up.

This take-out financing replaced more expensive financing and provided the Sponsor with the capital needed to finalize the renovation and move to permanent financing. With no prepayment premium and no interest rate cap, it was a very affordable way to bridge between the loans.