FINfacts™ XXIV – No. 280 | August 11, 2021

MARKET RATES
Prime Rate 3.25%
1 Month LIBOR 0.10%
6 Month LIBOR 0.16%
5 Yr Swap 0.91%
10 Yr Swap 1.36%
5 Yr US Treasury 0.80%
10 Yr US Treasury 1.33%
30 Yr US Treasury 2.00%

RECENT TRANSACTIONS
$18,600,000 Construction Financing for 109-Unit SFR Construction in an Opportunity Zone; Phoenix, AZ

Terms Confidential

Transaction Description:

George Smith Partners successfully advised on $18,600,000 in construction financing for a 109-unit build-to-rent and Opportunity Zone transaction in Phoenix, AZ. This follows on the successful $7,100,000 JV equity financing GSP advised on. This single family for rent community will offer one, two and three-bedroom detached homes with upscale furnishings and private yards for most units. The Sponsor has five more transactions under contract. This was the first transaction for our Sponsor who is optimistic about the popularity and emerging trend of the build-to-rent niche.

Advisors

Ed Steffelin
Senior Vice President
Evan Kinne
Senior Vice President
Miles Musalman
Senior Vice President
Portrait Blair Lewis
Analyst
Jordan Lipton
Analyst

$6,669,200 Acquisition Financing for 76-Unit Multifamily Portfolio, 3.30% For 5 Years,3 Years Interest Only; Portland, OR

Rate: 3.30% fixed for 5 years
Term: 30 years
Amortization: 3 years interest-only followed by 30-year amortization
Prepayment Penalty: 3,1,0
LTV: 65%
DCR: 1.20x
Guaranty: Non-Recourse

Transaction Description:

George Smith Partners secured $6,669,200 in proceeds for the acquisition of two properties comprising 76 units in Portland, OR. The loans are fixed at a rate of 3.30% for 5 years, with 3 years of interest-only payments. The loans are non-recourse and have no payment reserves.

Several challenges were encountered when discussing the transaction with capital providers. Most multifamily loans in Portland are closed through Fannie Mae and Freddie Mac, but these lenders quoted a high rate due to the small size of the market. As a result, GSP had to focus on non-recourse bank lenders, of which there are only a small number active in the market. GSP was able to find a bank with a strong local presence that provided the highest leverage option at a very competitive rate. The pricing was equal to that of multifamily loans in Southern California. The acquisition loan closed in about 60 days.

Advisors

Shahin Yazdi
Principal/Managing Director
Jonathan Lee
Principal/Managing Director
Matthew Kirisits
Vice President
Miles Musalman
Senior Vice President
Kyle Redmond
Assistant Vice President
Jessica Mania
Marketing and Business Development Associate

35 Day Close, 70% Acquisition Financing of 4-Unit Multifamily Property; Beverly Grove area of Los Angeles, CA

Rate: Prime + 0.25% w/ floor of 3.50%
Term: 5 Year, First 12 Months I/O
LTV: 70%
DCR: 1.20
Prepayment: No Prepayment

Transaction Description:

George Smith Partners arranged $1,495,000 in permanent financing for the acquisition of a stabilized 4-unit multifamily property located in the Beverly Grove area of Los Angeles, CA. GSP was simultaneously helping the Sponsor close on a few multifamily refinances within their portfolio to pull cash out and use as equity for the acquisition of this Property. Although the occupancy at purchase was 100%, rents were below market because the Seller self-managed the Property and there was a need for exterior and interior improvements. The Sponsor wanted to lock in a low rate to allow for more cash flow to be used towards their value-add strategy. The loan represents 70% of the purchase price and was structured as a floating rate 5-year term, with 12 months interest-only. The interest-only period allows for more property cash flow to be used towards building improvements. The loan has no prepayment penalty, allowing for additional flexibility. Despite being on a strict closing deadline, GSP was able to identify a bank lender who could close within 35 days.

Advisors

Bryan Shaffer
Principal/Managing Director
Ruben Bohbot
Vice President
Michael Smilove
Assistant Vice President

If you have an inquiry regarding George Smith Partners’ commercial real estate financing, please contact your GSP representative or Todd August, Chief Operating Officer at (310) 867-2995 or taugust@gspartners.com


WWW.GSPARTNERS.COM

Constellation Place
10250 Constellation Blvd., Ste. 2700
Los Angeles, CA 90067
Office 310.557.8336
Fax 310.557.1276
Email finfacts@finfacts.net
© 1999 - 2021 George Smith Partners, Inc. DRE # 00822654 FINfacts is an ePublication of George Smith Partners, Inc. For Promotional Purposes Only. All Rights Reserved.
Hi, just a reminder that you're receiving this email because you have expressed an interest in George Smith Partners. Don't forget to add finfacts@finfacts.net to your address book so we'll be sure to land in your inbox!