George Smith Arranges Interest-Only Financing, Finds Buyer for Borrower
- Aug 25, 2010
Redlands, Calif. – George Smith Partners arranged $12.8 million in Freddie Mac financing and a $16.6 million sale for a 198-unit, Class B multifamily property in Redlands, Calif., announces David Rifkind and Steve Bram, principals and managing directors of George Smith Partners.
“George Smith Partners was able to utilize their correspondent relationships with Freddie Mac to provide the financing, despite the fact that some lenders and investors view the Inland Empire as a market full of distressed and undesirable property,” Rifkind says.
The interest rate was 5.18 percent fixed for 10 years with two years of interest-only, followed by a 30-year amortization.
During the contract period, the original buyer, a George Smith Partners’ client, unfortunately had lost his source of equity and came to George Smith Partners to also find a new equity partner or a buyer to purchase his position.
George Smith Partners immediately introduced the original sponsor to another of its client, a West Los Angeles-based investor with property both locally and nationally, who was able to close in the required 35 days.
“The investor had great foresight to understand the micro dynamics of not only the Redlands market, but also of this property’s position within that market,” Bram explains. “And they worked around the clock to review the due diligence to commit to move forward.”
The property, Citrus Grove Apartments, is located in Redlands, Calif., adjacent to the University of Redlands. It is a 198-unit multifamily complex, which historically has seen strong performance, often outperforming other similar properties within its own market.
“This made the property a very attractive investment that will be stable long term and have great potential for growth. The challenge lay in the fact that the institutional seller had only provided the buyer a very short, five-week deadline to close this loan,” Rifkind adds.