A Georgia-based real estate investment firm was seeking vertical construction financing for a climate-controlled self-storage facility in Atlanta. For this sponsor, the priority was rate and I/O period to ensure debt service was manageable during the lease-up period. While the storage market has softened and some credit boxes have become constrained, Gumption was able to find banks willing to provide a low rate and the desired I/O. The winning lender was able to close at 80% LTC with 42 months of I/O, due to the sponsor's strength and track record.
While non-bank lenders can provide flexibility in some regards, they can be rigid and uncompromising in others. Banks, especially regional banks, can get very creative for the right sponsors. As one of Gumption's banking partners is fond of saying, "Policy should be written in pencil."
Deal snapshot
| Metric | Terms |
|---|---|
| Property type | Self-storage |
| Deal type | New construction |
| Market | Atlanta, Georgia |
| Loan amount | $10.4M |
| Rate | SOFR + 250bps floating (~6.15% as of writing) |
| Term | 5 years |
| Amortization | 25 years |
| I/O period | 42 months |
| LTC | 80% |
| Lender fee | 0.30% |
| Winning lender type | Bank |
How Gumption secured the best terms
Sponsors had acquired the property in cash in late 2024 and finished the permitting and entitlement process earlier this year, so significant equity was already built into the capital stack. The submarket was ripe for a new storage development, with strong population growth and limited supply.
While multiple lenders on Gumption's platform were interested, one stood out from the rest in what it was able to offer. This is a bank that is newer to market and does not operate a physical branch locally yet. Most would not think to call this bank, but Gumption's algorithm knew it could still be a good fit. Gumption's capital markets team handled negotiations and represented the borrower until closing.
Need financing for a ground-up development? Match your deal with the best lenders from Gumption's network of ~900 banks, credit unions, and private lenders.