|
FINfacts™ XXIV – No. 23 | June 8, 2016
|
|
|
| Prime Rate |
 3.50 |
| 1 Month LIBOR |
 .45
|
| 6 Month LIBOR |
 .98 |
| 5 Yr Swap |
1.23
|
| 10 Yr Swap |
1.70
|
| 5 Yr US Treasury |
1.23
|
| 10 Yr US Treasury |
1.70
|
| 30 Yr US Treasury |
2.54
|
|
|
|
Rate: 3.625% Fixed for Five Years; Floating at LIBOR + 2.40%
Loan-to-Cost: 75%
Term: 10 Years
Amortization: Three Years Interest Only
Prepayment: 2%, 1%, Open
Non-Recourse
Lender Fee: Par
|
|
Transaction Description: GSP successfully sourced the $15,000,000 non-recourse acquisition loan for a 118-unit, Class-A apartment community located in a suburban community outside Seattle, Washington. The 75% loan-to-purchase, ten-year loan is fixed for five years at 3.625% with three years of interest only payments. The loan converts to a floating rate structure during the sixth year for the remaining ten year term at LIBOR + 2.40%. Our portfolio Capital provider did not charge an origination fee or require a cash management account, impounds or replacement reserves, which minimized upfront deposits and provides maximum flexibility for the duration of the loan. Stepping down from 2%, the loan is pre-payable with a favorable penalty structure and is open after the 2nd year without penalty.
|
|
|
|
Rate: 3.15% Fixed for 5 years; floating at 225 over 6 Month LIBOR
Term: 30 years
Amortization: 1 year IO
LTC: 65%
Lender Fee: Par
Non-Recourse
|
|
Transaction Description: George Smith Partners secured a non-recourse acquisition loan for a 15-unit value-add multifamily property in West Hollywood. The Sponsors are highly experienced owner/developers of Southern California retail and multifamily real estate. Although the property is in excellent location, most of the units lacked full kitchens, kitchenettes, and sinks. Our Sponsor’s considerable experience in repositioning assets at market rents, in conjunction with the subject’s phenomenal location allowed our capital provider to offer 65% of purchase with the first year paid on an interest-only basis. Fixed at 3.15% for five years, the loan will float at 225 over LIBOR for the remaining term.
|
|
|
|
As Wall Street loan originators gear up to structure for the risk retention requirements as mandated by Dodd/Frank, the majority of Investment and Retail Banks are once again actively soliciting product for securitization prior to the December regulations taking hold. Subsequent to the last quarter “speed bump” experienced in the secondary market, significant demand exists for transactions underwritten to an 8.0% debt yield (and below for high quality assets) at spreads in the low to mid-200s. Flagged hospitality is underwritten down to a high-9% debt yield. Interest only may be offered for two to three years; longer on lower leveraged transactions. The appetite is strong for stabilized cash flows for loans from $3,000,000 to $70,000,000 in primary and secondary markets nationwide.
|
|
|
Last week’s “shocker” jobs report of 38,000 added (vs. expectations of 160,000) was the worst since 2010. Treasury yields plunged immediately on Friday and stayed low as Fed Chair Yellen’s remarks on Monday took a June rate increase off the table, preferring to wait out the big “Brexit” vote and another jobs report. Unless the next jobs report is super-strong, look for the Fed to wait for September. Credit Spreads: Perm loan spreads (CMBS and Life Co) continue to tighten, with new 10 year loans pricing in the 4.25%-4.50% range. But CMBS lenders are “shrinking the box” (lower proceeds) as they deal with stricter rating agency standards and upcoming regulatory issues regarding risk retention. stay tuned.
David R. Pascale, Jr.
|
|
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!
|
|
