FINfacts™ XXIV – No. 104 | January 31, 2018
|
|
|
Prime Rate |
4.50 |
1 Month LIBOR |
1.57 |
6 Month LIBOR |
1.97 |
5 Yr Swap |
2.58 |
10 Yr Swap |
2.75 |
5 Yr US Treasury |
2.53 |
10 Yr US Treasury |
2.72
|
30 Yr US Treasury |
2.95 |
|
|
Rate: LIBOR+375
Term: 24 Months + One 12 Month extension
LTC: 75%
Recourse: Completion Only
Prepayment Penalty: None
|
George Smith Partners placed an $11,000,000 non-recourse construction loan for the ground up development of 40 multi-family units in the Conejo Valley sub-market of Los Angeles County. The area has high barriers to entry for new product in regards to entitlements and design review, and took several years to gain all necessary approvals. As a result this project will be the first new development that has broken ground in the sub-market since 2004. Equipped with sub-2% market vacancy, GSP secured a non-recourse loan with an institutional capital provider at leverage of 75% LTC and priced at LIBOR + 375. The loan also provides for extension options and has no prepayment penalty.
|
|
|
Rate: 4.4%
Term: 10 year fixed rate loan
LTV: 75%
Guarantee: Recourse
Amortization: 25 years
Prepayment: None
TI/LC Reserves: None
Rate Lock: Five Months; No Cost
|
George Smith Partners successfully arranged the $7,850,000 cash-out refinance secured by a 109,059 square foot shopping center in St. Louis, Missouri. Anchored by Marshalls and JCPenney, the 10-tenant shopping center, currently 100% occupied, has two major tenant leases expiring in 2021. Excess loan proceeds will be set aside for future capital upgrades and tenant improvements. Funds are self-directed and not part of a lender established reserve. Sized to 75% of value, the loan was funded prior to receiving SNDA (Subordination, Non-Disturbance, Attornment) or estoppels. A $250,000 holdback will be release upon receipt of SNDAs and estoppels. Fixed at 4.4% for 10 years, the loan amortizes over 25 years with no prepayment penalty. A free five-month rate lock was executed at LOI execution.
|
|
|
Rate: LIBOR + 4.50%
Term: 2 Years + 2 Six Month Extensions
Amortization: Interest Only
LTV: 66.8%
Guarantee: Top 20% Recourse
|
George Smith Partners successfully arranged $4,300,000 to refinance a 15 key motel on Coronado Island, San Diego. GSP identified a local lender who understood the Sponsor’s entitlement play based on their past success, their proposed development plans post entitlement, and the value of the land, which was exempt from any influence of the California Coastal Commission. Ultimately, the lender sized the loan to 66.8% of “As Is” appraised value. The two-year interest only note is priced at 4.50% above LIBOR and has 2 six-month extension options. Upon successfully obtaining the required entitlements, the Sponsor plans to refinance with a construction loan for a planned 39 key hotel.
|
|
|
George Smith Partners identified a national capital provider funding fixed or LIBOR-based floating rate loans from $3,000,000 to $75,000,000, starting at 4.5%. This lender will finance Multifamily, Retail, Office, Industrial, Self-Storage, Mobile Home Parks, and Hospitality properties located in primary and secondary markets nationwide. 30-year amortization and terms up to 10 years on a non-recourse basis up to 85% LTV.
|
|
Yellen’s last meeting as Fed Chair saw the short term rate left unchanged as expected. The statement indicated a firmer belief that the Fed’s 2.0% target inflation rate will be achieved in the “near term”. Continuing strength in oil prices (now firming up at the $65 per barrel price) and long awaited pressure in wage growth are contributing to the bullish inflation outlook. Note that the closely watched Employment Cost Index rose 2.6% in 2017, the highest rate in a decade. Employment shortages are being reported in some major cities and/or sectors, in addition to well publicized employee bonuses being attributed to the tax cut. The speculation game is on as to how many increases in 2018? A March increase is considered “done” plus another two expected based on futures markets and the Fed’s own “dot plots”. Today’s statement spurred some expectations of four increases this year. The 10 year T yield crested about 2.75% today before settling around 2.71%. Supply/demand dynamics are also pressuring Treasury yields as the Treasury announced $66 billion in long term debt sales this quarter, the first increase since 2009. The cause is not the tax cuts, that hasn’t even been factored in yet. It’s the baby boomers as Medicare, Social Security and other costs are increasing. Stay tuned. By David R. Pascale, Jr. , Senior Vice President at George Smith Partners
|
|
Constellation Place 10250 Constellation Blvd., Ste. 2700 Los Angeles, CA 90067
|
|
|
© 1999 - 2024 George Smith Partners, Inc. DRE # 00822654 FINfacts is an ePublication of George Smith Partners, Inc. For Promotional Purposes Only. All Rights Reserved.
|
|
|
Hi, just a reminder that you're receiving this email because you have expressed an interest in George Smith Partners. Don't forget to add finfacts@gspartners.com to your address book so we'll be sure to land in your inbox!
|
|