FINfacts XXIV – No. 469
August 21, 2025Market Rates
Recent Financings
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Advisors
Scott Croul
Senior Director
Morgan Johnson
Analyst
Micah Look
Analyst
Senior Loan
Rate: Floating at SOFR + 295 (3.00% floor/3.50% cap)
Term: 2+1+1+1 years
Fee: 1 point origination, 0.1% exit feeAmortization: Interest-Only years 1-3, amortizing in year 4 if less than 8% DY at $25,000/mo with year 5 amortizing at $25,000/mo.
LTV: 72.5% as is & 67.5% stabilized
Debt Yield: 7.37% going-in & 10.07% stabilized
Guaranty: Non-Recourse
Preferred Equity
Rate: 15.50%
Current Pay: 8% year 1 increasing 1% annually to maximum 12%
Fee: 2 points
Term: Co-terminus with senior loan
Amortization: Interest-OnlyLTV: 72.5% as is & 67.5% stabilized
Debt Yield: 6.68% going-in & 9.14% stabilized
Guaranty: Non-Recourse
$25,400,000
Transaction Description:
George Smith Partners secured $25,400,000 in proceeds for the refinance of an existing bridge loan on a 78-unit multifamily asset constructed in 1965 with recent partial rehab and located in Fremont, CA. The Lender provided proceeds of 67.5% of appraised value towards the existing loan and to continue the property renovations. The Preferred Equity provided capital to fund a shortfall on the existing loan balance and transaction costs to achieve a cash-neutral refinance for a combined 77.6% LTV.
The new first trust deed refinanced a maturing bridge loan into a new 5-year senior loan offering a minimum 2-year term and prepayment flexibility for the remaining 3 years and included a future funding to continue and complete the property’s unit renovation plan. The co-terminus preferred equity provided additional capital to fund a shortfall on the existing loan balance as well as the transaction costs to achieve a cash-neutral refinance.
Several challenges were encountered when discussing the transaction with capital providers. The required leverage to achieve proceeds was higher than lenders would allow for the asset and the amount of preferred equity needed for a cash neutral transaction fell below the minimum investment threshold for most preferred equity groups. In addition, the existing loan was quickly approaching maturity.
GSP was able to source a lender with deep experience in the market and with GSP. They provided market leading pricing and sizing on the loan and inspired the greatest confidence to meet the closing deadline. For the preferred equity component, GSP identified a local private investment group that would fund the preferred equity amount, but for whom this represented their first preferred equity transaction. GSP advised the preferred equity provider through the transaction structure, terms, and documentation process to facilitate the investment.
The financing closed in just 38 days from application signing to pay-off the existing on its maturity date deadline to deliver full proceeds on time.
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