Rate: LIBOR + 3.40%
Term: 36 Months, Two 1-year Extensions
LTC: 70%
Guaranty: Non-Recourse except for standard carve outs, bad acts, and environmental. Completion guaranty
Fee: 1.0% Origination

Transaction Description:

George Smith Partners successfully placed a non-recourse $40,000,000 bridge loan to fund the acquisition and repositioning of a 330-bed student housing project in Orange County, California during the COVID-19 pandemic. Directly adjacent to a non-power five campus, the University’s decision to not hold in-person classes due to COVID-19 severely impacted the Property’s occupancy levels at the time of acquisition. Additionally, the Project was undergoing renovations when the pandemic struck.

GSP leveraged its diverse lender relationships to attain 70% of project cost, including an extensive CapEx budget to be used for existing unit renovations and the construction of additional residential density. GSP ensured no negative arbitrage by structuring a draw schedule accretive to the Sponsor’s business plan. Despite the economic uncertainty during the transaction, GSP worked with the Lender to maximize proceeds while addressing Lender concerns of potential COVID related shortfalls.

Rate: 6%
Term: 19 months + two six-month extension options
Amortization: Interest Only
LTC: 50%
Guaranty: Full recourse
Banking Relationship/Deposits: None

Transaction Description:

George Smith Partners successfully placed $14,750,000 in a cash-out construction loan for the completion of a high-end luxury home in Los Angeles, California. The loan retired a higher interest rate, funded an interest reserve account, and provided additional proceeds to fund the remaining budget of the development. The nineteen-month loan term was structured to provide the Sponsor with time to finish construction, obtain certificate of occupancy and sell the asset. Many lenders were on the fence about lending to the high-end luxury market or did not want to take on the risk of financing a mid-construction project. GSP leveraged its expertise of the Los Angeles market along with its local lender relationships to achieve all the Sponsor’s goals.

Rate: 4.90% Fixed; Resets after Year 5
Term: 5 Years + Extension Option for 5 Years
Amortization: 1 Year Interest Only; 25 Years thereafter
LTV: 58%
Guaranty: Recourse

Transaction Description:

George Smith Partners successfully arranged a $1,200,000 permanent refinance for a fully occupied, eight-unit industrial building in the Sun Valley neighborhood of northern Los Angeles, CA. The Sponsor acquired the fully entitled site in 2015 and completed construction in 2016. The Property consists of two buildings totaling 8,084 SF on a 20,452 SF parcel.

The Sponsor had a Chapter 13 bankruptcy due to the impacts of the Great Recession. Having worked diligently to pay off creditors, the bankruptcy was ultimately discharged in 2017. At the same time, the Sponsor’s real estate portfolio grew substantially despite very limited access to capital sources. GSP was engaged in hopes of capitalizing on the low interest rate environment despite the bankruptcy being on record.

GSP focused on the Sponsor’s strong track record and leveraged its longstanding relationship with a lender who provided a 4.90% fixed rate for 5 years, with a 5-year extension option. The loan is interest only the first year and then fully amortizing for the remaining 24 years.