Dealmaker: George Smith Partners Secures $69M in Bridge Financing

George Smith Partners, Los Angeles, secured $68.5 million in bridge financing for mixed-use properties in Colorado and California.

In Longmont, Colo., northeast of Boulder, GSP arranged $62.7 million in non-recourse bridge financing on a new construction mixed-use property with 253 apartment units above 10,000 square feet of retail.

Despite delivering in the early stages of the global pandemic and statewide stay-at-home order, the building has maintained relatively robust lease-up velocity through unconventional marketing methods such as virtual touring. GSP engaged a newly established debt fund to supply a cash-neutral refinance of the project’s maturing high-leverage construction debt, which could not be extended.

The 75 percent loan-to-value bridge facility priced at LIBOR plus 500 basis points with a 36-month term and two 12-month extension options.

GSP advisors on the transaction included Principal/Managing Director Malcolm Davies, Senior Vice Presidents Zachary Streit and Alexander Rossinsky, Vice President Annah Blanton and Assistant Vice Presidents Aiden Moran, Maxwell Shedlosky and Brandon Asherian.

The firm also arranged $5.8 million to refinance and recapitalize an approved mixed-use conversion back to 100 percent multifamily use in Santa Barbara, Calif. The sponsor acquired the mixed-use office and multifamily project in early 2019. It negotiated the early termination of several long-term office leases and obtained approvals to convert the entire property back to multifamily. Soft demolition began early this year with insufficient funds available in the existing acquisition/bridge loan to complete the revised business plan.

GSP had placed the original acquisition/bridge loan. Though the current loan went under application as the COVID-19 pandemic started, the only delay was due to the appraisal process. The firm identified a bank lender who underwrote to the new business plan and provided capital at less than half of the previous loan cost while providing an additional 40 percent in proceeds.

The 18-month interest-only bridge loan priced at Prime plus 0.75 percent and can convert to a five-year term. GSP Senior Vice President Alina Mardesich worked on the transaction.