FINfacts™ XXIV – No. 38 | September 21, 2016

MARKET RATES
Prime Rate 3.50
1 Month LIBOR 0.54
6 Month LIBOR 1.26
5 Yr Swap 1.19
10 Yr Swap 1.49
5 Yr US Treasury 1.19
10 Yr US Treasury 1.66
30 Yr US Treasury 2.38

RECENT TRANSACTIONS
$11,571,000 Non-Recourse ‘70’s Vintage Multifamily Cash-Out Refinance in a Tertiary Northern California Market

Rate: 3.50% Fixed (Initial 7 Years)
LTV: 70%
Term: 30 Years
Amortization: 4 Years Interest Only; 30 Year Amortization thereafter
Prepayment: 3%, 3%, 2%, 2%, 1%, 1%, Open
Non-Recourse
Lender Fee: Par

George Smith Partners successfully sourced $11,571,000 in non-recourse first mortgage financing on a 116-unit, 95% occupied multifamily community located in a Northern California agricultural market. The 70% leveraged loan has a 30-year term and is fixed for seven years at 3.50% before floating at 6 Month LIBOR + 2.35%. The cash out refinance has four years of Interest Only payments, maximizing cash flow to the Sponsor before converting to a 30-year amortization schedule. This loan is open for prepayment after Year 6 of the term. There are no tax, insurance, or capital reserve impounds.

Advisors

Nick Rogers
Vice President

$3,000,000 Single-Tenant Industrial Floating @ 2.28%

Rate: LIBOR+1.75%
Term: 10 Years
Amortization: 30 Years
LTV: 55%
Recourse

George Smith Partners placed the $3,000,000 permanent refinance of a 40,000 square foot single-tenant industrial building in Gardena, California. Sized to 55% of value, the loan floats at LIBOR+1.75% for the 10 year term and is amortized over 30 years netting a substantial cash flow after debt service. Single tenant event risk was mitigated with the low loan to value and the vanilla use of this asset in a strong industrial market. Our Sponsor requested floating rate debt to take advantage of the low LIBOR index as well as maintain flexibility for future equity calls; either through sale or refinance.


Picture
HOT MONEY
Portfolio Commercial to 70% of Value from $20,000,000

George Smith Partners identified a national balance sheet lender funding stabilized and transitional assets from $20,000,000 to $100,000,000 on a non-recourse basis. With the ability to advance up to 75% of value for multifamily and 70% for core commercial assets, pricing starts at LIBOR +400 for floating rate reposition requests and 10 Year Treasury +225 for stabilized executions. Additional leverage and mezzanine financing is selectively available.

More Hot Money ›

Pascale's Portrait
PASCALE'S PERSPECTIVE
Divided Fed Holds Steady and All But Guarantees December Increase

The Fed statement today revealed an increasingly divided and hawkish committee, with three out of ten voting to raise rates immediately. This is one of the most divided Fed meetings since The Great Recession. Fed Chair Yellen said she expects a rate increase “this year” at the subsequent press conference. Since the November meeting has no press conference and is the week before the US election, any Fed movement is highly unlikely on that date. What is more interesting (as a single hike in 2016 has long been anticipated), is the pace of future rate increases. The Fed lowered their expectation of US growth from 2.0% to 1.8%. Officials now predict two rates hikes next year and three in 2018. This reflects the Fed is accepting tepid growth as part of the “new normal” reality post Great Recession. Normal growth might settle at sub 2.0%. The wild card is inflation. If inflation increases more than expected, all bets are off and rapid rate increases could be back on the table. Stay tuned.

David R. Pascale, Jr.

More Perspectives ›

WWW.GSPARTNERS.COM

Constellation Place
10250 Constellation Blvd., Ste. 2700
Los Angeles, CA 90067
Office 310.557.8336
Fax 310.557.1276
Email finfacts@finfacts.net
© 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!