FINfacts XXIV – No. 474
October 9, 2025Market Rates
Recent Financings
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Advisors
Rachael Sery
Managing Director
Martha Martinez
Assistant Vice President – Capital Markets & Loan Servicing
Adrian Diaz-Infante
Analyst I
Rate: 6.45% Fixed
Leverage: 65.0% loan-to-value
Term: 3-year term
Amortization: 30-year amortization schedule
$4,400,000
Transaction Description:
George Smith Partners successfully arranged $4,400,000 in construction takeout financing for a newly completed 23-unit affordable housing community located in South Los Angeles. The financing supports the refinancing of existing construction debt and provides additional capital for property stabilization. The loan features a structured funding approach with the possibility of an earn-out upon achievement of operational milestones.
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Advisors
Jonathan Chassin
Managing Director
Shuvo Hussain
Vice President
Chandana Reddy
Analyst
Senior: $41.6 million (CMBS)
Rate: 6.26% Fixed
Term: 5 Years
Interest-Only: 5 Years
LTV: 70%
Debt Yield: 8.25%
Pref: $8.93 million
Rate: 8% current; and partial accrual
$50,530,000
Transaction Description:
George Smith Partners secured $50.53 million in proceeds ($41.6 million in senior debt/CMBS execution, and $8.93 million in preferred equity by AXCS Capital, GSP’s parent company) to refinance a 297-unit apartment complex in Richmond, TX. The Sponsor executed an affordable housing partnership with the Housing Authority by which the Property’s unit mix would be restricted to 87 units for families earning ≤80% Area Median Income (AMI);62 units for families earning ≤60% AMI;148 market-rate units; and at least 5 units reserved for Housing Choice Voucher holders. Accordingly, the Property would be conferred property tax exemptions. The partnership is structured as a ground lease (99-year term) with the Housing authority. The Sponsor needed to pay off the existing loan balance from Loancore.
Several challenges were encountered when discussing the transaction with capital providers, including educating capital providers with the unusual PFC structure and legislation in Texas, as well as dealing with an ongoing property management change. GSP also had to marry a preferred equity piece with senior debt that would be securitized, which added an additional layer of complexity.
Pascale’s Perspective
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Homes Got Richer, People Didn’t
By Annie Lai, Analyst
Over the past 40 years, home prices have skyrocketed by 480%, while incomes have gone up 240%. Buying a home feels harder for our generation than it did for our parents.
The National Association of Realtors’ Affordability Index hit its lowest point in decades in 2022, due to soaring housing prices and rate hikes. Though some cities tried loosening zoning codes to unlock supply, whatever gains appeared were eroded by inflation. According to the Bureau of Labor Statistics (BLS), construction materials are up 40% since 2020, and builders are still short hundreds of thousands of workers.
Meanwhile, mortgage rates are still hovering near decades-high levels, and the Fed is not in a dovish mood. Nearly two-thirds of homeowners are locked into sub-4% loans and would rather stay put than trade up. As for potential buyers, staring down 6.5% rates and hefty down payments, most just keep waiting it out and renewing the lease.
These structural drivers are unlikely to shift in the near term, and that is why rental demand keeps holding strong and probably will. That’s well reflected in the 116,000 multifamily units absorbed in Q2 2025 (source: Cushman & Wakefield). After all, if you can’t own the house, you can still rent the dream.
Source: Statista
Source: BLS
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