Dealmaker: George Smith Partners Secures $58M for Multifamily

George Smith Partners, Los Angeles, secured $58 million in financing for two 1970s- and 1980’s-vintage workforce housing apartment buildings in Georgia.

The financing included $45 million in non-recourse acquisition debt and $13 million of joint venture equity. The collateral includes 680 units in Atlanta suburb Norcross, Ga.

George Smith Partners Principal and Co-Founder Gary Mozer worked with Senior Vice Presidents Michael Anderson-Mitterling, Katie Rodd, Kyle Howerton and Assistant Vice President Nick Rogers on the financing.

“Workforce housing presents a tremendous investment opportunity in the current market,” Mozer said. “Lenders look favorably on this product type based primarily on the exponential demand for moderately-priced housing throughout the country.” 

Mozer noted the Atlanta metro is particularly well positioned to benefit from this demand due to its rapid population growth–more than 78,000 new residents in the past year–as well as an “impressive” job growth rate.

Fannie Mae recently reported Atlanta’s job market expanded 4 percent in the first quarter compared to 1.5 percent nationally.

The firm leveraged several factors to secure the financing for the private investor sponsor, including Fannie Mae’s Multifamily Green Financing program, which enabled the team to achieve an 80 percent loan-to-value ratio and a reduced interest rate of LIBOR plus 2.15 percent.

“The newly formed joint-venture equity partnership we arranged for the sponsor will allow an investment of $5.5 million into the two properties to upgrade the common-area amenities and interiors, as well as the ability to implement a green-energy saving initiative and strategic management platform,” Anderson-Mitterling said. “The repositioning is key, as it allows our client to upgrade the amenities while simultaneously reducing operating costs through sustainability solutions.”

Mozer said the financing increased the sponsor’s cash flow throughout the repositioning because the loan will be interest-only for the first four years, followed by a 30-year amortization thereafter.