George Smith Partners Lands $115M Financing for LA Community

The cash-out refinancing is for a 566-unit multifamily community near the LA Music Center.
The Orsini II, Los Angeles

The Orsini II, Los Angeles

Los Angeles—Despite recent volatility in the CMBS market, commercial real estate investment banking firm George Smith Partners (GSP) was able to secure $115.3 million in cash-out refinancing for a 566-unit multifamily community in downtown Los Angeles. GSP arranged the financing on behalf of Southern California-based developer GH Palmer Associates for the Orsini II, a Class A property adjacent to the LA Music Center.

GSP’s Principal and Managing Director Gary Tenzer arranged the financing, noting that while many borrowers are concerned about refinance transactions because they think they may “require capital injections in order to close,” multifamily product in Los Angeles has fared well and values are high enough to support cash-out transactions.

He added that lenders were particularly interested in this asset because it,s well-maintained (having been completed in 2008), currently 99 percent occupied, and the sponsor has a strong track record, leading GSP to be “successful in securing extremely competitive terms for [the] client.”

The 10-year, interest-only, floating rate loan was secured at 57 percent loan to value. In 2011, GSP also arranged a $92 million refinancing for the developer for a maturing construction loan on the property, including $79 million in senior debt financing and $13 million in preferred equity.

The Orisini II is a mid-rise property built over a three-level parking garage. On the corner of Figueroa Street and Cesar Chavez Avenue, the community is within walking distance of central downtown Los Angeles. Units come in studio, one- and two-bedroom floor plans, with some two-bedroom loft units. There is more than 20,000 square feet of ground-floor retail.

Image via the Orsini website