Rate: LIBOR+5.00%
Term: 3+1+1
Leverage: 64% LTC
Guaranty: Non-Recourse

Transaction Description:

George Smith Partners successfully advised on $12,000,000 in joint venture equity financing and $23,900,000 in non-recourse senior construction financing for the ground-up development of a 185- home build-to-rent community. Single-family-for-rent communities are a newer asset class and this project was among the first in the market. These communities offer the experience of living in a single-family home with the ease and cost of living in an apartment building. The Sponsor expects the project to be well received as there are distinct competitive advantages over the existing apartment product in the market place for several reasons including the new construction, low density and both interior and exterior privacy.

Advisors

Evan Kinne Managing Director, GSP; CEO, AXCS Capital

Ed Steffelin Managing Director, GSP; President, AXCS Investments

Rate: Fixed at 3.5% for 5 years then floats at 6 Month LIBOR + 3.25%
Term: 20 years
Amortization: 30 years
Prepay: 5,4,3,2,1
LTV: 65%
DCR: 1.2
Interest Only: 3 Years
Guaranty: Non-Recourse

Transaction Description:

George Smith Partners secured $7,167,000 in non-recourse financing for a mixed use property with 46 residential units and 5,350 sf of ground floor retail space. The financing provides 65% leverage and is fixed at a rate of 3.50% for five years with three years of interest-only payments. Several challenges were encountered when discussing the transaction with capital providers. Since the Property is mixed use, extensive market comparable data was required to prove out the value of both the residential and retail portions. A different cap rate was applied to each component of the Property before summing the individual values. This process demonstrated that the Lender’s underwritten value was well supported. One of the retail spaces is occupied by a nightclub and several lenders declined the deal because of the high turnover rate with this type of tenant. GSP showed that the nightclub was in place for over 10 years and remains very popular to this day. Despite rates rising during the diligence process, the Lender held the rate even without a formal rate lock.

Advisors

Matthew Kirisits Director

SENIOR
Rate: 3.9% Fixed for 15 Years
Amortization: 15 years self-liquidating
Fee: 1/4% /25bp
Prepayment: 3-3-2-2-1 open
LTV: 75%
DCR: 1.20

REVOLVER
Rate: Prime -1% or 3.75%
Amortization: Interest Only
LTV: 80%

Transaction Description:

George Smith Partners placed a structured senior and collateralized line of credit revolver in a cash-out execution for a business in Los Angeles. The first loan was structured to be self-liquidating over 15 years with a fixed rate of 3.90%. The $1,000,000 second trust deed is a true revolver that can be used as a check-book and has no limitations on uses. The second loan is priced at 3.75% (Prime minus 1%). Funds may be drawn down, re-paid and re-drawn without additional bank approval. There is no non-utilization fee. As the credit line is collateralized, there is no mandatory “clean-up” for funds outstanding over 12 months.