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3/21/16
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George Smith Partners (GSP) secured $16.25 mil in non-recourse construction financing on behalf of an institutional fund manager for the ground-up development of Silver Springs Townhomes, an 18-unit, luxury townhome project in the La Jolla Village submarket of San Diego.
The development site is an assemblage of two contiguous parcels, 7601 Draper Ave and 720 Silver St in La Jolla, on which a single-story vet clinic as well as a U.S. Postal Service location currently exist. The planned 18-unit, 41.9k sf townhome-style development will replace these structures, resulting in a centrally located residential community that is within walking distance of restaurants, shopping and the bluffs overlooking Torrey Pines and the Pacific Ocean.
GSP’s Jonathan Lee, David Stepanchak and Adam Candler arranged the non-recourse construction financing, which is sized to 65 percent of total development cost, for a 24-month term. The loan is priced at PRIME + 1.00 percent with a floor of 4.75 percent. A construction completion guarantee was provided, although there is no repayment guarantee.
“This project will be the first of its kind to come online in the La Jolla submarket in many years,” says Lee. “This market is extremely supply-constrained and competitive, and demand for residential product in this high-end area continues to climb. Our client was seeking non-recourse financing for this Class A residential development, which will deliver luxury homes in the $2 mil sales price range.”
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