FINfacts™ XXIV – No. 360 | March 15, 2023

Prime Rate 7.75%
1 Month LIBOR 4.73%
6 Month LIBOR 4.96%
5 Yr SOFR Swap 3.31%
10 Yr SOFR Swap 3.18%
5 Yr US Treasury 3.48%
10 Yr US Treasury 3.41%
30 Yr US Treasury 3.63%

$8,400,000 Bridge to Perm Financing for 122-Unit Multifamily Portfolio; Dallas Texas

Rate: 7.4% Fixed
Term: 5 Years
Prepayment Penalty: 3, 2, 1, 0
Amortization: Interest Only 24 Months
LTC: 80%, 100% Rehab & Renovation
Guaranty: Recourse

Transaction Description:

George Smith Partners secured $8,400,000 for an acquisition bridge to perm loan for a 122-unit multifamily Property portfolio in Dallas, Texas. The Property had a single family that owned the project for over 20 years and never tried to push rents, so the debt service coverage at closing was below 0.20x. For most lenders, this was a quick pass, but GSP utilized its vast relationships and experience in the community development space to identify a unique mission-based bridge lender who would see the community benefit for the renovation of this property.

In addition to the low debt yield, the property also had a higher vacancy than the rest of the market and higher expenses. Because of our relationship with the Lender, we were able to expedite the application process. GSP assisted the Sponsorship team in developing a strong business plan and creating a clear vision of how to reach their occupancy goals. This included proving the benefits of the Sponsorship structure which incorporated their experienced in-house rehab team, as well as getting the Lender comfortable with the Sponsorship’s overall mission. GSP understood the dynamics of the Sponsorship team and helped the Lender understand the strategy that would allow for a quick lease-up and a stronger NOI.

Construction Financing up to 90% LTC

George Smith Partners has identified a capital provider financing construction projects up to 90% of cost. Loans range from $25,000,000- $150,000,000 and are non-recourse for up to a 36-month term. Lending nationwide, pricing starts at SOFR+600 and can close in under 60. Fixed pricing is also available with interest only during the initial term. This lender also provides bridge financing for most asset classes including self-storage, condos, hotels, and SFR.

More Hot Money ›

Pascale's Portrait
Bank Failures, Market Turmoil, “Systemic Risk” Fear, Stabilization Hopes

The Silicon Valley Bank and Signature Bank collapses set off a week of wild volatility, market fear (risk-off), massive new rescue facilities from governments and money center banks, and the dust hasn’t settled. The events have also sharpened the divide between the “Too Big To Fail” money center banks and the regional banks. The TBTF banks have more stringent capital requirements and are in better shape to withstand volatility. The latest attempt (announced today) to stabilize First Republic Bank involves 11 major banks depositing $30 billion in FRB as a sign of confidence. This is on top of Sunday’s announcement of the Bank Term Funding Program (BTFP) which allows banks to borrow against their portfolio of secure bonds (Treasuries/MBS/Fannie and Freddie Securities) at par (the original price) and not today’s mark to market value (less than the original price due to rate increases). This is a critical facility as the Fed’s rapid rate increases have left many banks in a potentially illiquid position. Banks bought Treasuries in 2019-2022 while prices were high and yields were ultra low. Depositors poured money into banks during this low rate environment. The spike in Treasury yields over the past year drained deposits out of banks and into Treasuries, Money Market Funds, etc – and left Banks in a cash poor position while holding devalued collateral. This week has also seen a $50 billion rescue facility implemented by Switzerland’s central bank for Credit Suisse, a major international bank twice the size of SVB. Today has been the calmest day in markets since the SVB collapse last Friday…

What about next week’s Fed Meeting? Next week’s Fed meeting will present a conundrum for Powell and friends. Today is the one year anniversary of the first rate increase of this cycle of hikes. The Fed has spent a year tightening financial conditions, draining liquidity from the system, etc. Their intent was to pressure Main Street (employers, consumers, retailers, etc.), but their measures are now putting pressure on the financial system. Will the “cracks in the system” possibly spur the Fed to pause the increases at next Wednesday’s meeting? Maybe the focus should be on a suspension of Quantitative Tightening. The Fed is selling/rolling off $95 billion of bonds a month. Remember that the Fed was purchasing $80 billion of bonds per month last March. The selling devalues bonds while draining liquidity out of the system. The recent data (CPI as expected, PPI deflationary) may give Powell enough breathing room to “talk tough and pause.” Another possibility: Acknowledge financial market stress (“We’re monitoring it closely”), raise rates 25 bps and stop QT completely (or even start QE again?). Stay tuned…

By David R. Pascale, Jr., Senior Vice President at George Smith Partners

More Perspectives ›

If you have an inquiry regarding George Smith Partners’ commercial real estate financing, please contact your GSP representative or Jessica Mania, at (310) 867-2974 or


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