FINfacts™ XXIV – No. 95 | November 22, 2017

MARKET RATES
Prime Rate 4.25
1 Month LIBOR 1.31
6 Month LIBOR 1.63
5 Yr Swap 2.13
10 Yr Swap 2.33
5 Yr US Treasury 2.06
10 Yr US Treasury 2.33
30 Yr US Treasury 2.78

INTRODUCTION

HAPPY THANKSGIVING

Best wishes for a happy and healthy Thanksgiving.


RECENT TRANSACTIONS
$14,000,000 Non-Recourse Upscale Boutique Hotel Reposition Financing on Ground Lease

George Smith Partners arranged the 65% of cost reposition and conversion financing of a historic building to a 96-key upscale boutique hotel in Seattle, Washington. A 75-year ground lease was recently renegotiated to make debt financing more palatable. The capital structure implemented a historic tax credit funding to facilitate the property reposition and conversion of use. GSP underwrote the monetized value of the ground lease to articulate the gross lease payments were below the actual cost of what the land acquisition would have been to the project: IE; it is less expensive to lease the land rather than acquire in an arms-length transaction. Terms of the 65% loan-to-cost non-recourse loan are confidential.


$3,150,000 Construction Loan in Los Angeles, Take-Out; 3.10% Fixed

Rate: 3.10% Fixed for Five Years
Term: 10 Years
Amortization: 30 Years
LTV: 65%
Prepay: 3,2,1, open
Loan Fee: 0.5%

George Smith Partners placed the construction loan take-out for a new 12-unit multifamily development in the Koreatown District of Los Angeles. At the time of funding, there was no operating history for the property as the Certificate of Occupancy had just been issued. Our Sponsor lacked 30 days of collections to prove out income. The permanent lender underwrote the rent roll in place in conjunction with proforma operating expenses to determine the underwritten Net Operating Income. Fixed for five years at 3.10%, the ten year term will float at LIBOR plus 275 years six through ten, amortized over 30 years. Sized to 65% of stabilized value and 80% of actual costs, prepayment steps down from 3% and is open after the third year.

Advisors

Matthew Kirisits
Director

$2,400,000 Delayed-Purchase Refinance for Two Adjacent Newport Beach Duplexes Closed in 3 Days of Application at 80% of Cost

Rate: 7.50%
LTC: 80%
Term: 9 Months + Two – 3 Month Options
Fee: 1.5 points
Guarantee: Recourse
Prepayment Penalty: None

George Smith Partners arranged a $2,400,000 quick-close delayed-purchase refinance for two adjacent Newport Beach duplexes. The sponsor approached GSP with an extremely tight closing time frame due to the need to redeploy refinance proceeds into a pending acquisition. Certainty of execution was therefore paramount. GSP identified a non-bank lender with a long history of providing quick close bridge execution and familiar with the location. Sized to 80% of purchase with no hold back requirement for interest reserve or capital expenditures, the loan carries a 9-month term, interest only payments at a 7.50% fixed rate and no prepayment penalty. The loan also includes two 3 month extensions.


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HOT MONEY
Regional Portfolio Lender with Step-Down for Commercial Assets

With the majority of local and regional banks focused exclusively on multifamily products, GSP is originating commercial real estate loans with a regional portfolio lender offering five and seven year fixed terms mid-to-high 4% range. A personal repayment guarantee will net a 10 basis point reduction in rate. Ten year terms are structured as a 5+5 with a rate reset at the beginning of year 6. Prepayments step down from 3% and are open the final 12 months of the fixed term. Stabilized and light-bridge West Coast transactions from $3,000,000 to $10,000,000.

More Hot Money ›

If you have an inquiry regarding George Smith Partners’ commercial real estate financing, please contact your GSP representative or Todd August, Chief Operating Officer (310) 867-2995 or TAugust@GSPartners.com


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