| Transaction of the Week |  | |  | | Transaction Description: | | $25,000,000 Joint Venture Acquisition & Construction Equity George Smith Partners arranged the $25,000,000 Joint Venture equity to acquire a to-be-built multi-family development site in the Inland Empire, California. GSP was engaged with a very short timeframe to secure an equity partner that would permit the Sponsor to acquire the dirt in a competitive bid environment. The acquisition process required a "closed as applied for" structure should the Sponsor be awarded this development opportunity. GSP made a market to ensure no surprises after the deposit became non-refundable, and assisted in the negotiation of a venture that would provide capital through construction and stabilization. The new venture added overwhelming support assisting the Sponsor to win the bid. The Sponsor is expanding their Southern California multifamily platform and is currently working with this institutional partner on a subsequent multifamily development site. | | | | |  | | | | Smaller Portfolio Lenders Expanding their Programs Smaller local and regional banks are looking to diversify portfolios as stabilized multifamily market competition continues. Small banks are competing with Fannie, Freddie, regional, and national banks for stabilized multifamily product. As a result, yields continue to be driven down for a dwindling product supply as many apartments are locked-up on 10 year loans. More lenders are now looking outside the box, and will consider construction, bridge/reposition, commercial and special purpose assets priced at traditional bank yields. George Smith Partners has identified a local bank willing to lend $1,000,000 to $5,000,000 on stabilized multifamily on a national level. This same capital provider will also fund significant bridge/reposition requests for commercial assets in Southern California. Ground-up construction will require pre-leasing from an investment grade tenant. Non-traditional commercial uses (hospitality, assisted living, etc.) will also be considered. Coupons range from 4.75% to 6.0% based on product type and borrower strength. Non-recourse is available for sub-50% LTV loans on stabilized assets. | | | | Hot Money | Non-Recourse Bridge Debt from $5,000,000. Today's capital markets are providing ample funds for larger transitional assets. George Smith Partners has identified a national bridge debt provider who will fund down to $5,000,000 of capitalization and to 80% of cost on a non-recourse basis. This capital provider will consider below break-even assets or properties that are currently vacant with no in-place cash flow. Rehab construction funds will also be provided with a completion guarantee. Pricing will range from LIBOR 4.75 to 6.50 plus 1 point origination for up to a three year term before extensions. Products include the four core assets plus hospitality. | | | If you have an inquiry regarding George Smith Partners' commercial real estate financing, please contact your GSP representative or Todd August, Chief Operating Officer, at (310) 867-2995 or TAugust@GSPartners.com. | | | Speakers Corner | Founding Partner Steve Bram will be a panel participant on middle-market financing at the National Crittenden Real Estate Conference held in San Diego on April 22nd through the 24th. Discussions will include financing mid-sized regional projects and active regional banks & credit companies. More information on the "Elephants or Ants" panel and on-line registration may be found here. | | | Speakers Corner | George Smith Partners Principal Gary Tenzer will be participating in a Webinar panel: The Capital Markets Reality Check, a blunt and practical conversation on who is doing what to get deals closed in this economy. Pre-registration is required for the April 26th event. The broadcast will run from 4pm to 5pm followed by an in-person reception in the Westfield Century City Mall. More information and registration is available here. | |
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