Rate: Prime + 0
Term: 3 years
Amortization: IO
LTC: 65%
LTV: 60%
Guaranty: Non recourse
Lender Fee: 1 point

Transaction Description:

George Smith advised on $27,000,000 of debt and equity financing for 163 purpose built, single family homes for rent in Humble, Texas. Bank debt of $16,700,000 was secured on a non-recourse basis. The homes will range from 1,200 sf to 1,500 sf and will each have a two car garage. Amenities are expected to include greenspaces, a neighborhood lodge, a fitness room, a children’s playroom, and a playground for both children and adults. Infrastructure development will commence immediately, and home construction is expected to commence in the second quarter of 2020. Initial occupancy is expected for late in the second quarter of 2020. The Property will include on-site leasing and management. The location of the Property is in close proximity to growing employment hubs including George Bush Intercontinental Airport, Generation Park, and the Port of Houston. The Community is situated in the award-winning Humble Independent School District and residents are zoned to the recently built Groves Elementary School and Westlake Middle School in The Groves master-planned community, as well as Summer Creek High School.

Advisors

Ed Steffelin Managing Director, GSP; President, AXCS Investments

Evan Kinne Managing Director, GSP; CEO, AXCS Capital

Rate: 3.68%
Term: 10 Years
LTV: 56%
Guaranty: Recourse

Transaction Description:
George Smith Partners successfully arranged a $10,200,000 refinance of a 69,552 square foot, multi-tenant office building in San Diego. The permanent recourse financing is fixed at 3.68% for the first five years with a rate reset for the remaining five years. The loan amortizes for 25 years with a declining step down prepay penalty.

Challenges:
There is rollover risk of approximately 53% of the square footage from the largest tenant, with their lease expiring in three years. Because of this, other lenders proposed limited loan terms of five years or less or simply declined the financing request. Lender’s willing to finance required reserves to mitigate the rollover risk which was unappealing to our Sponsor.

Solutions:
George Smith Partners worked with a new banking relationship who was able to get comfortable with the rollover risk given the conservative 56% loan to value request. The strength of the Sponsor and longevity of ownership helped the Lender meet the Sponsor’s financing requests.

Rate: 8.3%
Term: 1 Year
Amortization: Interest only
LTV: 80% of Purchase Price
Prepayment: None
Guaranty: Non-Recourse
Lender Fee: 1%

George Smith Partners secured financing for a non-recourse $3,400,000 covered land loan for a hotel development in Los Angeles. There is currently an existing building on the Property which allowed GSP to structure a highly leveraged land loan. Usually land loans are limited to 50% of the purchase price, but GSP’s strong relationships and experience allowed for the value of the current improvements to achieve much higher leverage.