Summary: Continental Partners arranged a $7,690,000 debt refinance for a property pool consisting of five Multi-Family properties in the greater Los Angeles Area. The Sponsor requested a fixed-rate, non- recourse loan in order to refinance the existing loan and provide cash out. The five properties consist of 115 units in total and totaled five different loans. Financing for each loan was sized to 65% of value with a 30-year amortization schedule and closed at 3.35% with a flexible prepayment penalty of 3, 2 and 1%.
Opportunity: Although there was a single Sponsor the deal became incredibly complex with the different ownership structures which included family trusts, limited partnerships and limited liability corporations. In one instance the Sponsor owned as little as 5% of one of the assets and Continental Partners was able to work with the Lender to not require any other membership partners to be underwritten for one of the five loans. The five loans had a total of 37 different membership partners.
Result: Continental Partners approached a number of their correspondent lender relationships and was able to find a lender who understood the assets, appreciated the Sponsor’s business plan, experience, and was able to underwrite the complex entity structures. To accommodate this loan request Continental Partners leveraged its relationship with the Lender so that they loosened their prepayment penalty to a three-year step-down structure.