Transaction Details

Loan Amount: $12,600,000
Rate: 210bps Over 10 Yr. Swap Rate
Term: 10 Years
Amortization: 30 Years
LTV: 78%
DCR: 1.17
Prepayment: Defeasance
Recourse:  Non-Recourse
Lender Origination Fee: Par

Transaction Description

Summary: Continental Partners sourced 10-year fixed, non-recourse financing for Southwood Townhomes – a 98-unit multifamily property in Sacramento, California. The $12,600,000 loan funded at 78% LTV, with a 7.25% debt yield and a 1.17 DCR. The interest rate was fixed for 10-years and priced at 210 basis points over the 10-year swap rate. The loan amortizes over a 30-year schedule.

Opportunity: Based on market comps, the appraisal came back lighter than anticipated. The 10-year swap rate was also drastically fluctuating on a daily basis. The Sponsor was unlikely to proceed if we didn’t meet the cash out request needed to payback equity investors. The Sponsor was also leaning towards non-recourse financing given the complicated TIC ownership structure.

Result: Continental Partners approached 25 Lenders with this request and was able to procure 11 quotes. The Sponsor elected to proceed with the most competitive non-recourse proposal. The funding Lender was an international correspondent of Continental Partners’. Continental Partners worked with the appraiser to derive a fair valuation and held its ground when challenged by the Lender to fund per the terms of the application. Continental Partners monitored and timed the market to rate lock on a day with a market drop, so all parties involved walked away pleased with the results.