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CASE STUDY: SIMPLICITY CAPITAL

Successfully securing small multifamily financing for an out-of-state investor

Key Information

Service Lines Engagement

  • Capital Markets, Debt & Structured Finance
  • Valuation & Advisory Services

Location

Jacksonville, FL

Topline

  • $1.65M Loan
  • 52 Units

The Opportunity


Before discovering CBRE, Simplicity Capital, the borrower, had previously worked through many smaller mortgage brokers and hadn’t developed a strong relationship with any one particular shop, instead electing to source financing on a deal by deal basis. Cambridge Park, a 52-unit multifamily property in Jacksonville, FL, was much smaller than many of the other properties Simplicity Capital had previously acquired. From a fixed-cost standpoint, the borrower knew it would generally cost the same amount to secure financing for this deal as it would any of his larger deals so he needed to ensure the outcome did not miss the mark, remained as cost efficient as possible and would positively influence the returns. An 80% LTV was crucial to make the deal work, and until this point, the borrower had only received quotes in the high 60 and low 70 percent LTV range, and even considered dropping the deal at one point due to the undesirable terms. Adding a level of complication was the borrower’s geographic distance from the asset, being located in New Jersey while the property was in Florida.

 

The Solution


Knowing CBRE was both an industry leader and proven at structuring creative financing solutions for smaller assets, an external broker put Simplicity Capital in contact with CBRE, who turned around the first set of terms in just a few hours. Once awarded the deal, CBRE immediately set up a thorough kick-off call with the borrower including the entire CBRE team, from attorneys and closing team to underwriters and analysts, to walk through explicit details and to ensure the entire team was aligned, given their various physical locations around the country. Both the appraisal and property engineering services were completed in house, with the CBRE Valuation and Assessment Services teams being engaged within the first few days. Financing was secured through CBRE’s Freddie Mac Small Balance Loan program, facilitating the borrower’s first of several loans through Freddie Mac. In the end, all timelines were met or exceeded, and deal terms improved for the client, ultimately closing at a higher 81% LTV and a lower rate than originally targeted. The outcome helped the borrower deliver a very positive message to his investors, resulting in a commitment of additional funding toward the company’s strategy of buying new, larger properties for the portfolio.

The borrower was so impressed with the overall process and outcome that before Cambridge Park even closed, they awarded a second property to CBRE to finance without shopping it around at all, even closing within 20-30 days of the initial deal close. CBRE helped Simplicity Capital improve its reputation as a “closer” and become a more recognizable name in the Florida market. Within the last year, Simplicity Capital has closed three deals with CBRE with over $9+ million in financing. Several other Simplicity-owned deals in the pipeline are currently being repositioned for refinancing through CBRE down the road.


"CBRE’s transparency along with their speed and accuracy help me make critical decisions in minutes vs days or weeks. CBRE tells me day 1 what I will get and have always either come through or beaten their numbers. This has helped me to significantly grow and expand both my company and portfolio."
Dan Tokayer, President | Founder
Simplicity Capital

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Ben Weddington
Vice President
Atlanta, GA
+1 404 504 7871
+1 901 604 5652