Rate: 3.03% Fixed
Term: 10 Years
Amortization: 2 Years Interest Only, 30 Year
LTV: 69%
Prepayment: Yield Maintenance
Guaranty: Non-Recourse

Transaction Description:

George Smith Partners successfully placed $19,700,000 in non-recourse permanent debt for the refinance of a 185,000 SF power center in a tertiary Midwest market. The Property is fully leased with all tenants in occupancy and is comprised of strong national credit tenants with long term leases. It serves as the main retail center for its town. The proximity to a secondary metropolitan market 10 miles away promotes crossover shopping at the center.

At the beginning of COVID-19, the state government closed all non-essential businesses for 3 months. Throughout the COVID-19 pandemic, none of the tenants requested rent abatement and limited rent deferral was required. The strength of the Sponsor as a national owner and operator of retail centers, the lack of negative impact due to COVID and the fact that the center was the most dominant in the City all contributed to the center’s attractiveness to lenders. The timing occurred in the face of a large contraction of lending on retail. GSP guided the financing from application to closing in only 30 days and secured a 10-basis point reduction in the coupon on the day of rate lock.

Rate: 3.35% Fixed
Term: 5 Years
Amortization: 5 Years Interest Only
LTV: 65%
DSCR: 1.25x
Prepayment: 3,2,1
Loan Fee: Par
Guaranty: Non-Recourse

Transaction Description:

George Smith Partners placed 5 non-crossed loans totaling $13,770,000 to complete the refinance of a 67-unit multifamily portfolio in Los Angeles. The financing represents a significant return of equity to the Sponsorship while simultaneously lowering their previous interest rate. The loans all carry a fixed interest rate of 3.35%, a 5-Year term, and include interest only payments ranging between three and five years. In contrast to many lenders that are currently structuring six to twelve months of P&I reserves, GSP successfully negotiated waiving any shortfall structure.

Given the current market challenges (stemming primarily from COVID) even multifamily properties are experiencing additional scrutiny from both underwriters and appraisers. Despite these new hurdles, GSP was successful in maintaining the loan proceeds originally represented in the application. Through a combination of presenting real-time comparable market data to the appraiser and working with the Lender to increase the initial LTV stipulation, GSP overcame the valuation issues that arose as a result of the final appraisal. After presenting market data on a number of similar stabilized asset transactions we demonstrated that LA multifamily properties with consistent occupancy and collections have exhibited minimal value declines, ultimately convincing the Lender to increase the LTV constraint from 60% up to 65% and preserving the full cash-out proceed amounts.

Advisors

Matthew Kirisits Director

Blended Rate: 7.41% Fixed
Lender Fee: 1%
Term: 12 Months, Interest Only
LTV: 70%
Prepayment: None
Guaranty: None on First Mortgage; 50% on Second Mortgage

Transaction Description:

George Smith Partners secured $8,750,000 in total financing comprised of a 60% LTV first mortgage and a 10% LTV second mortgage for a 35-unit multifamily property in San Jose, CA. The loans provided significant cash-out proceeds at a blended rate of 7.41%. Both loans have a 12-month term, interest-only payments and are open to prepayment without penalty. Recourse is limited to 50% of the second mortgage only. The Property has maintained full occupancy and rent collections despite the COVID-related impacts in the overall market. The Lender did not require reserves for potential COVID rental interruption. The Sponsor developed the Property in the 1980s and engaged GSP to provide a high leverage, quick-close financing solution. The financings closed within 8-days of the Lender’s issuance of term sheets.

Advisors

Gary M. Tenzer Managing Director & Principal / GSP Co-Founder