Low Interest Rates Offset Prepayment Costs

The owner of the Orsini II, a 566-unit apartment complex in Downtown Los Angeles, has secured a $128.1 million loan. The loan replaces an existing $115.2 million floating rate loan, which had a eight years remaining in the term. As a result, the borrower was required to pay prepayment penalties. However, low interest rates offset the cost of the prepayment penalties.

The new loan has a 10-year term and has a fixed-rate, interest-only, non-recourse at 4.24% with a 55% loan-to-value. Gary M. Tenzer, principal and co-founder at George Smith Partners secured the funding on behalf of the borrower.

The Orsini is located at 550 Figueroa in Los Angeles. It is a five-story, over podium apartment complex and features a three-level parking garage.