Rate: 5.41% (7-Year Treasury + 2.40%)
Term: 7 Years
Origination Fee: Par
LTV: 62.5%
Prepayment: Yield Maintenance Years 2-4, 2%, 1%, 0%
Guaranty: Non-Recourse

Transaction Description:

George Smith Partners secured a $14,430,000 permanent loan for an 85-unit, 208-bed, student housing property near the University of Memphis. The Sponsor was able to lock rate at application and secured the 5.41% fixed rate for seven years. In a rising rate environment, the ability to lock rate at application gave the Sponsor confidence in the terms of the loan and provided a clear path to closing. Prior to the refinance, the Property was encumbered by the construction loan having been recently completed in 2021. The Property was extremely successful in its first year of operations, having leased up to over 90% occupancy. During GSP’s marketing process, the property was significantly pre-leased for the upcoming school year providing lenders with the assurance of forward cash flows and clarity in their underwriting process. GSP contacted a variety of lenders including life insurance companies, CMBS lenders, and banks to provide the client with a wide variety of avenues to capture the most competitive lending terms in the current economic environment.

First Trust Deed
Rate: 8.90% Fixed
Term: 12 months with One 6-month Extension Option
LTV: 65%
Amortization: Interest Only
Origination Fee: 1.00%
Exit Fee: None
Prepayment: Open
Guaranty: Non-Recourse

Second Trust Deed
Rate: 13.50% Fixed
Term: 12 months with One 6-month Extension Option
LTV: 65% – 85%
Amortization: Interest Only
Origination Fee: 3.00%
Exit Fee: None
Prepayment: 6 Months Minimum Interest
Guaranty: Non-Recourse

Blended Debt
Rate: 9.98% Fixed
Term: 12 Months with One 6-month Extension Option
LTV: 85%
Amortization: Interest Only
Origination Fee: 1.47%
Exit Fee: None
Guaranty: Non-Recourse

Transaction Description:

George Smith Partners successfully closed a 1st and 2nd Trust Deed at 85% of the purchase price for unentitled land in the Koreatown neighborhood of Los Angeles, CA. The two loans have a blended rate of 9.98% for the twelve-month initial term. The Sponsor will have a six-month extension option available. GSP was able to identify two lending sources, to maximize leverage, who understood the market and the demand for multifamily development in this location.

Advisors

Steve Bram Managing Director & Principal / GSP Co-Founder

David R. Pascale, Jr. Senior Vice President

Allison Higgins Senior Vice President

Nick Rogers Vice President