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| Piero II Apartments, 609 St. Paul Avenue, Los Angeles, CA |
LOS ANGELES, CA – Commercial real estate investment banking
firm George Smith Partners has successfully arranged $70 million in financing
for the cash-out refinance of Piero II Apartments, a 335-unit luxury
multifamily community located in downtown Los Angeles, according to George
Smith Partners’ Principal and Managing Director Gary M. Tenzer.
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| Piero II Apartments Lobby |
The property owner, an institutional quality developer,
engaged George Smith Partners to secure financing in order to pay off the
property’s maturing $65 million construction debt.
“This transaction was unique because of the specific
financing being sought by the client,” explained Tenzer, who noted that George
Smith Partners’ client was seeking interest-only financing with a floating
rate, without recourse or requirements for any interest rate derivatives.
“While floating rate loans usually carry lower interest
rates than fixed and are generally available in the current market most
borrowers are apprehensive to take on a loan without a fixed interest rate due
to the risk of future payment increases.” he explained.
Tenzer continued, “Because the owner’s current portfolio is
comprised of quality, fixed-rate financing, our client was well-positioned to
take on the uncapped floating rate risk and ultimately achieve the best
possible interest rate.”
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| Piero II Apartments Theater |
George Smith Partners secured a non-recourse loan for its
client through an off-shore commercial bank, that closed at a rate of
LIBOR+155, approximately 1.72 percent, with a 5-year, interest-only term.
The loan was used to pay off the existing construction debt
for Piero II Apartments, a Class A multifamily community located in downtown
Los Angeles.
Construction was completed
in Fall 2011, and the property is currently over 95 percent occupied, according
to Tenzer.
“This property benefits from a growing demand for
multifamily rental housing in the flourishing downtown market,” Tenzer
explained. “Businesses are now
gravitating to this iconic part of Los Angeles, resulting in an increased need
for rental housing.”
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| George M. Tenzer |
According to Tenzer, securing a large loan to pay off
construction debt can often be a challenge for borrowers.
“In this case,
however, the steady rental demand, coupled with the security in the borrower’s
owner history allowed our firm to achieve a highly competitive rate for our
client, while meeting each of the loan requirements,” Tenzer said.
Piero II is located at 609 St. Paul Avenue in the
City of Los Angeles. The property is comprised of 335 units featuring studio,
one- and two-bedroom floor plans.
The community was
built with an Italian-inspired design and is located directly across the street
from a sister property, Piero Apartments. The two properties are connected by a
pedestrian bridge over St. Paul Street.
Apartments in the community feature panoramic skyline and
city views, as well as luxury finishes including stainless steel appliances,
nine-foot ceilings, full-size washer and dryers, walk-in closets, Italian
marble vanities and individual balconies or patios.
The property also
features community amenities such as a spa, theater, library, gym, fire pit and
communal barbecues.
Founded in 1992, George Smith Partners is a leading national
real estate investment banking firm that specializes in arranging financing for
commercial and multifamily properties, including acquisition, construction,
bridge and permanent loans, as well as mezzanine loans, highly leveraged
participating loans and joint venture equity.
The company has
arranged more than $35 billion in financing since its inception.
Additional information about George Smith Partners is
available at www.GSPartners.com
For a complete copy of the company’s news release, please
contact
Corynne Randel/ Jenn Quader
Brower, Miller & Cole
(949) 955-7940
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