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FINfacts™ XXIV – No. 30 | July 27, 2016
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| Prime Rate |
 3.5 |
| 1 Month LIBOR |
0.49 |
| 6 Month LIBOR |
 1.07 |
| 5 Yr Swap |
1.13 |
| 10 Yr Swap |
 1.41
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| 5 Yr US Treasury |
1.09
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| 10 Yr US Treasury |
1.51
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| 30 Yr US Treasury |
2.21
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Rate: LIBOR+2.85%
Term: 3 years + Two 1-Year Extensions
Amortization: Interest Only for 2-years
LTC: 65%
Prepayment: Step Down Prepayment, No Fee after Month 18.
Release Provisions: Structured release provisions
Non-Recourse
Lender Fee: 0.75%
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George Smith Partners successfully structured and placed the non-recourse acquisition bridge loan for a five building multi-tenant industrial/office park, totaling 536,000 square feet in the Western United States. While the property was 100% occupied at funding, a tenant occupying 15% of the gross rentable square footage will vacate within six months of the purchase. $37,800,000 of the on-book financing was funded at closing with the remaining $2,400,000 to be future funded for re-tenanting as well as upgrading the exteriors and common areas. Interest will not be paid on future funding until disbursement. George Smith Partners was able to structure release provisions for the various parcels. The interest rate floats at L+2.85% for a three year term and is interest only for the initial two years of the term. There are two (2) one-year extensions.
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Rate: 5.50% Fixed
Term: 15 Years
Amortization: 30 Years
DCR: 1.20
Non-Recourse
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George Smith Partners placed the $4,000,000 cash-out refinance of a 53-unit Single Room Occupancy affordable project in San Francisco. SROs are multifamily properties although units are designed more like dormitories with shared bathrooms and/or kitchens. The subject is master leased to a non-profit agency that provides low income housing. Our Sponsor requested a term in excess of 10 years to mitigate future financing exposure for a some-what special use asset. Although the in-place master leases were used in underwriting, George Smith Partners also conducted a market study to confirm cash flow should agency funding issues arise. A partial return of equity as well as the funding of a future capital reserve account was established through this financing. Fixed for 15 years at 5.5%%, this non-recourse loan amortizes over 30 years.
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 Our newest family member, Olivia Elliott Anderson |
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George Smith Partners is honored to present some very exciting news from Michael and Rachel Anderson. The Anderson’s welcomed a healthy Olivia Elliott Anderson to this world on July 24th. Weighing in at 6 pounds, 11 ounces, Olivia arrived at 10:32 AM Sunday morning wearing a pair of beautiful blue eyes. At 20.5 inches, the WNBA has already started their recruitment of Olivia into their league. Welcome to the family, Olivia!
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George Smith Partners is now accepting applications for our full-time Fall 2016 Rotational Analyst Program. Entry-level analysts will rotate through various teams and be exposed to all facets of commercial real estate investment banking. This competitive rotational program lasts 15 weeks where analysts will be evaluated for the possibility of a permanent position at the firm. Please submit your resume and cover letter to careers@gspartners.com by August 5th, 2016. Additional information can be found here.
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George Smith Partners is placing non-recourse debt on stabilized asset with a national capital provider for on-book Life Insurance quality assets. Fixed or floating rate coupons are competitive with alternative on-book and securitized product although total lender third-party costs are capped at $25,000 (including legal) for transactions from $2,000,000 to $15,000,000. Prepayments may be structured to accommodate the Sponsors’ business plan. Sized to 75% of value, a 8.0% or better debt yield must be supported at the time of funding.
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Fed Ready to Raise Pre-Election? Today’s statement indicated the Fed’s “risk fear factor” has diminished greatly in the past few months. Less than expected fallout from Brexit, improving US economic reports (unemployment, retail sales, etc) and recent positive news from China have given the Fed confidence that their second rate increase in this cycle is appropriate. But when? The September and December meetings are the likely dates; but will an institution designed to be “apolitical”, act in September, 6 weeks before the Presidential election? Today’s statement seems to indicate they are ready for a September bump if the data continues to support such a move. The futures market is favoring December. CMBS Update: Spreads are tightening as recent pools have been well received. The Dodd Frank risk retention rules take effect in late December, but new loans originated in October/November need to be compliant. Many originators have structured entities and pool structures to accommodate the new regulations requiring them to retain 5% of the collateral (instead of selling all of it into the capital markets). The first such compliant pool will go to market next month, with three major originators teaming up. The execution of this pool will be closely watched and should provide guidance as how new loans will be priced at the end of 2016 and into next year and beyond. The next few months could be a golden opportunity (low treasury, no risk retention) for borrowers. Right now, new 10 year loans are pricing in the low 4’s. stay tuned
David R. Pascale, Jr.
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Constellation Place
10250 Constellation Blvd., Ste. 2700
Los Angeles, CA 90067
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© 1999 - 2024 George Smith Partners, Inc. DRE # 00822654 FINfacts is an ePublication of George Smith Partners, Inc. For Promotional Purposes Only. All Rights Reserved.
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