The GSH Group Successfully Closes $365M Loan Modifications with Arbor Realty

The GSH Group
With the modified loan terms and additional equity from GSH and investors, GSH now has a three-year window to execute its business plan, boost Net Operating Income, and transition to a fixed-rate mortgage. This achievement reflects Arbor's confidence in GSH's capabilities, and GSH is now poised to pursue its adjusted roadmap, protect equity, and aim for a successful exit.

The GSH Group, one of the nation’s fastest-growing multifamily real estate investment companies, announces the closing of loan modifications on several properties with Arbor Realty, marking a significant milestone in the company’s growth and success.

This successful closing is the result of a long and intricate negotiation process involving $365 million of senior loans issued in 2021 and 2022, just prior to the rapid rise in interest rates that caused upheaval in the real estate market and the broader economy. While many operators across the country are facing foreclosure and elimination of investor equity, GSH has been able to preserve the integrity of the deals and make a monumental and positive step towards stabilizing assets. The loan modification includes GSH and its investors contributing additional capital to each deal and a combination of the purchase of new rate caps, mortgage interest accrual, and additional mezzanine financing to cover interest rate induced cash shortfalls through the new loan period.

Gideon Pfeffer, GSH Managing Partner and CEO, expressed his excitement about the successful loan modifications, stating, “The successful negotiation and closing of these loan modifications exemplify GSH’s dedication to innovation, adaptability, and resilience. This milestone represents a tremendous achievement for GSH and brings us one step closer to realizing our business plan. The support and confidence shown by Arbor Realty and our investors have been instrumental in overcoming the market challenges we faced. We now have a clear path to execute our strategy and achieve a successful exit.”

Given the recent market shakeups, GSH is identifying significant buying potential in the multifamily real estate market, specifically from operators struggling to carry out their business plans on floating interest rate bridge loans. GSH, with its robust platform and proven track record, is approaching a pivotal window to acquire and stabilize these struggling assets, from which its investors will greatly benefit. GSH will soon launch an equity fund to capitalize on these opportunities.