Rate: 30-Day LIBOR + 5.00%
Term: 3-years plus two 12-month extensions
Amortization: 3-years interest only; 30-year amortization thereafter
Loan to Cost: 75%
Prepayment: 12-month yield maintenance; open thereafter subject to 1.33% exit fee through month 24, 1.66% exit fee through month 30 and 2.00% thereafter
Guaranty: Non-recourse
Lender Fee: 0.00%

George Smith Partners arranged $7,400,000 in non-recourse bridge financing from a national balance sheet lender for the acquisition and re-position of a 36-unit, 1960’s multifamily asset located within one block of Long Beach’s trendiest neighborhoods. The 75% of total project cost loan includes $1,300,000 ($36,000/unit) of future capital expenditures for unit and property upgrades and there is no interest charged on unused allocated capital expenditure funds.

The loan is structured with an increasing exit fee in lieu of an upfront lender origination fee to minimize upfront costs and incentivize the Borrower to execute the business plan in a timely manner. However, the three-year initial term protects the Borrower from impending maturity in the event that the renovation takes longer than projected.  After an initial 12 month spread maintenance period, the exit fee is 1.33% for months 13 through 24, increasing to 1.66% for months 25 through 30 and 2.00% for months 31 through 36.

Borrower cash flow is maximized as the loan is interest only during the initial three-year term.  The interest reserve covers debt service shortfalls during the re-position period.

Advisors

Nick Rogers Vice President

Rate: 4.71%
Term: 5 Years
Amortization: 25 Years
Loan to Value: 55%
Prepay: 1-1-1-0-0
DCR: 1.3x
Guaranty: Non-Recourse

George Smith Partners arranged a $2,475,000 non-recourse loan for the acquisition of a 693-unit Self Storage facility in a major metropolitan market in the Southwest.  Although the facility is well located near a major university and a central business district, many lenders were uncomfortable with the facility having below market occupancy, limited frontage to the road, deferred maintenance, and being niche property type.  The institutional sponsor also required fixed rate execution to hedge against rising interest rates, a non-recourse structure, and a flexible prepayment structure.  GSP sourced a lender familiar with the strength of the location and sponsorship as well as believed in the property’s upside.  Sized to 55% of purchase, the non-recourse loan carries a 4.71% fixed rate for a five-year term and amortizes over 25 years.  There is a one-point prepayment penalty for the first three years of the term with no prepayment penalty thereafter.

Rate: 9.00% Fixed
Term: 12 Months with four 3 month extensions
Amortization: Interest Only
LTV: 80%
Prepayment Penalty: None
Guaranty: Recourse
Origination Fee: 2%

George Smith Partners arranged 80% LTV land acquisition financing for a future multifamily development site in the Mid-City neighborhood of Los Angeles, California.  The sponsor, a non-resident non-citizen, sought maximum proceeds for the land acquisition and had a 30-day closing time frame from initial contact, which was impractical for many lenders.  Certainty of execution was critical as an extension to the purchase contract was not obtainable.  GSP identified a non-bank lender with a long history of providing quick close bridge execution and who was familiar with the location and comfortable with the land basis.  The loan was sized to 80% of value with no hold back requirement for interest reserve or capital expenditures.