Rate: L + 390 (senior)
Term: 5 Years
Amortization: Interest Only
Prepayment: None upon Certificate of Occupancy
Guaranty: Non-Recourse; Completion Guarantee with Standard Carveouts to an Entity

Transaction Description:

George Smith Partners successfully closed $58,000,000 in non-recourse construction financing for a seven-story, mixed use development across from Sony Pictures Studios and adjacent to Culver City, CA. The Project features 139 apartment units over 1,969 SF of ground floor retail. The Sponsor received a density bonus thanks to TOC incentives, in exchange for allocating 14 affordable units.

While this is the second U.S. project – the first was also financed by GSP – for a successful international developer, the pool of capital providers was significantly reduced due to the borrowing entity being headquartered in a foreign country. Presenting this deal during the height of the COVID-19 pandemic also presented significant challenges. GSP leveraged its structured financing expertise, lender relationships, strength of the Project and the Culver City market to negotiate the most desirable terms for the Sponsor.

The financings are comprised of $42,000,000 in senior construction debt from a Life Co. lender and $16,000,000 in preferred equity and includes a substantial amount in recap funds to the Sponsor at closing. The term is five years, with interest only payments and no prepayment penalty upon Certificate of Occupancy. The senior note is LIBOR + 390 and the preferred equity investment’s interest will be fully accrued during the entire term, thereby reducing the amount of interest reserve and the Sponsor’s initial cash equity contribution.

Rate: 9.25%
LTC: 81%
Origination Fee: 0.50%
Term: 18 Months Initial Term, One 6-Month Extension
Amortization: Interest Only
Prepayment: Subject to Minimum Interest Estimated at 12 Months
Guaranty: Non-Recourse with Completion Guaranty

Transaction Description:

George Smith Partners arranged $19,550,000 of senior construction financing for a ground-up cold storage facility located in Jurupa Valley, CA. The 125,000 square foot facility will serve as the headquarters for West Coast Cold Storage, a “for rent” cold storage provider focused on providing both refrigerated and frozen space to their Southern California customers. Existing cold storage facilities nationwide have an average age of over 40 years, demonstrating the need for new development within the space. With the sudden increase in online grocery orders and delivery, demand for well-located cold storage space has spiked. This flagship building will feature increased energy efficiencies and provide a variety of racking configurations to accommodate customer needs.

Located two blocks from State Highway 60, the Subject Property offers clients immediate access to the entire Inland Empire and Northern San Diego County. This location is also part of the Port of Los Angeles transportation line that handles 20% of incoming U.S. cargo and feeds all Southern California.

Structured to minimize the Sponsor’s equity investment, the non-recourse loan is sized to 81% of development costs and carries an 18-month term. Minimum interest requirements were negotiated to less than 5.5% of the committed loan amount as cold storage has a much shorter construction timeline when compared to other product types. Origination fees were allocated to post Certificate of Occupancy financing to further reduce the cash equity needed to close.

Rate: 7.97%% Fixed
Term: 1 Years
Amortization: Interest Only
Extensions: One 6-Month Option
Loan Fee: 1%
Recourse: Non-recourse
Prepayment: Open

Transaction Description:

George Smith Partners secured a $4,250,000 bridge loan for a new 13-unit multifamily community located in the Larchmont Village area of Los Angeles, CA. The non-recourse loan will be utilized to refinance the Project’s construction debt and complete the Property to get to Certificate of Occupancy. The loan represents 65% loan to stabilized value and is structured with a 1-year initial term with interest only payments. The loan allows for open prepayment and carries one 6-month extension option.

The loan is secured by a recently constructed mixed-use development comprised of 13 studio, one and two-bedroom units. The Project offers several unique features including several 2-story loft/townhome style apartments, an expansive roof top lounge with views, partial subterranean parking garage with a semi-automated parking system and EV charging stations.

GSP was able to secure a lender that underwrote to the stabilized NOI, closed with no debt service reserve, no recourse, and no prepayment fee. The selected lender could move quickly, did not require an appraisal, and funded within three weeks after issuing an application.