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| Transaction Description: GSP successfully placed the cash-out refinance of a 136-key flagged San Diego hotel. The 65% LTV permanent loan included a $6,000,000 return of equity to the Sponsor. This asset services both business and leisure travelers, and is the top performing hotel in its comparable set. The seven-year term is fixed at 4.75%, and amortizes over 25 years. The loan closed in under 40 business days from application, and in a tumultuous interest-rate environment. The Sponsor received a free rate lock at application that was held until close. |
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Challenge: With significant rate movement during the since Bernanke’s June speech, the Sponsor’s initial CMBS refinance fell through the week of closing due to skyrocketing rates and widening spreads. Indices similarly jumped during the processing of the replacement loan. |
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Solution: GSP quickly re-entered the capital markets upon cancellation of the CMBS transaction; sourcing and negotiating favorable portfolio financing which included a free rate lock to hedge against fluctuating rates. Though rates did continue their upsurge during due diligence, the lender honored the rate lock and closed without any deviation from the executed term sheet. |
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