TERMS CONFIDENTIAL

Transaction Description:

George Smith Partners successfully arranged $25,000,000 in construction financing for a condominium project in an affluent area in Los Angeles County. The Project commenced construction in 2017, however due to construction delays and cost overruns, the Sponsor needed additional money to complete the Project. The existing Lender did not want to upsize their loan. GSP was able to identify two distinct lenders to structure a 1st and 2nd Trust Deed to complete and sell-out the building. The total loan was sized to 75% of the net sell-out value of the Property. The Sponsor has owned the Property for over 10 years so the majority of equity was imputed land equity allowing for loan proceeds of 100% of hard costs.

Advisors

Steve Bram Managing Director & Principal / GSP Co-Founder

Allison Higgins Senior Vice President

David R. Pascale, Jr. Senior Vice President

Nick Rogers Vice President

Rate: 4.20%
Term: 5 Years Fixed, 15 Year Term
Amortization: 30 Years
Prepayment Penalty: 4,3,2,1
Lender Points: None

Transaction Description:

George Smith Partners arranged permanent financing for the acquisition of a master leased, multifamily property in San Diego, California. The complex is on a month-to-month master lease with a non-profit program that provides treatment and rehabilitation support to individuals and families facing substance abuse and behavioral health challenges. The Sponsor was in favor of this program and liked that it was promoting independent living and mental wellness. The Sponsor decided she wanted to keep the master lease in place instead of terminating it and turning the multifamily property into a traditional apartment building.

Challenge:

The Sponsor was in application with their relationship lender for over 6 weeks before finding out that they denied the loan. The Sponsor approached GSP immediately as their money had already gone hard and the Seller was growing impatient. In addition, the Seller had already identified the upleg of a 1031 Exchange and informed their agent to relist the Property and start fresh with a new buyer.

Solution:

GSP worked quickly to source a lender that allowed the Sponsor to keep the month-to-month master lease in place. GSP collaborated with the listing agent and buyer’s agent on getting an extension that everyone felt comfortable with. GSP closed the loan within the submitted time constraints.

Rate: 7-year LIBOR + 2.10% (all-in rate 3.46%), no floor
Term: 7 year fixed
Amortization: 25 years
Loan to Value: 31%
Prepayment: 5%, 4%, 3%, 2%, 1%
Guaranty: Recourse
Lender Fee: Par

Transaction Description:

George Smith Partners successfully arranged $1,500,000 of rate and term refinancing for a multi-tenant office building in Santa Monica, CA. The Property was constructed in 1975, and it has been recently renovated with 6,256 sf net rentable area. The Property is conveniently located near Santa Monica College, Downtown Santa Monica, and it is less than two miles away from Santa Monica State Beach. Santa Monica has been and still is one of the most highly sought-after office locations in the Los Angeles area by tenants and investors. The submarket has very significant supply constraints, though rental rates are lagging the metro average. The purpose of the refinance is to pay off the existing debt and take advantage of the low interest rate environment.

The Sponsor is self-managing the Property. They renovated the units recently and brought the rents up to market rate. The Building was 100% occupied by local and non-credit tenants at closing. All of the leases will roll within the first three years of the loan term.

GSP sourced a lender who is willing to offer a 7-year permanent loan term, without holding back Tenant Improvement and Leasing Commissions reserves. The loan is sized to 31%LTV, it has a fixed coupon of 3.46% with a 25-year amortization schedule.