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FINfacts™ XXIV – No.99 | December 16, 2017
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| Prime Rate |
 4.50 |
| 1 Month LIBOR |
1.51 |
| 6 Month LIBOR |
1.79 |
| 5 Yr Swap |
2.28 |
| 10 Yr Swap |
2.49 |
| 5 Yr US Treasury |
2.23 |
| 10 Yr US Treasury |
2.49 |
| 30 Yr US Treasury |
2.87 |
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WE WISH YOU A HAPPY & HEALTHY 2018!
Malcolm Davies, Gary Mozer, Steve Bram, Bryan Shaffer, Shahin Yazdi, Gary Tenzer, Jonathan Lee
& The George Smith Partners Family
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Rate: 30 day LIBOR + 315
Term: 24 months plus two 6-month extensions
Amortization: Interest only
LTC: 87% (75% with imputed equity)
LTV: 70%
Prepayment: None
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George Smith Partners successfully structured senior construction debt for a 29-unit condominium development in the Pico-Robertson neighborhood of Los Angeles. GSP targeted a capital provider who was not only knowledgeable about the location and marketplace, but also comfortable with the Sponsor’s experience and ability to execute the construction project. GSP was able to use the land lift in the entitlements to achieve imputed equity, making the loan 87% of actual cost and 75% LTC using appraised land value. Priced at LIBOR + 3.15%, the two-year term offers two 6 month extensions.
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Rate: 8.50%
Term: 18 Months + One 6 Month Extension
Amortization: Interest Only
LTV: (Purchase Price): 45%
Guarantee: Non-Recourse
Lender Fee: 1%
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George Smith Partners arranged $12,500,000 in non-recourse acquisition debt secured by both a 58,237 sf lot containing a K-12 Prep School and a 29,400 sf lot containing a largely vacant retail center. The properties are situated in the Koreatown and Chinatown district of Los Angeles respectively. GSP targeted a capital provider comfortable with foreign sponsorship, proposed entitlements, religious relationship of the property, quick closing timeline, and the ability to focus on the future value of the land parcel. Sized to 45% of the $28MM total purchase price and fixed at 8.50% on an interest only basis, the non-resource facility has an initial term of 18 months followed by an optional 6-month extension. The capital provider closed the loan in 14 business days, allowing the Sponsor to close on the property quickly given the sellers strict timeline. All prepayment penalties were waved, allowing the Sponsor the flexibility to refinance at a lower rate once entitlements or construction financing are obtained.
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Term: 10 Year Fixed
Rate: 10 Year Treasury + 230
Amortization: 30 Years
LTV: 70%
Guarantee: Non-Recourse
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George Smith Partners secured $4,520,000 funding to refinance a 110,000 sf multi-tenant retail shopping center located in a tertiary market, Center Point, Alabama. The center did not have any credit tenants; the largest tenants were Dollar Tree, Family Dollar and a regional furniture store. GSP was able to show lenders that these tenants were appropriate for the surrounding demographics. The 2.45% fixed coupon loan is sized to 9.0% debt yield and the 10-year term is fixed with a 30-year amortization schedule thereafter.
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George Smith Partners identified a national floating-rate balance sheet lender funding bridge transactions up to $25,000,000 on a non-recourse basis. With the ability to advance up to 80% of total capitalization, pricing starts at LIBOR + 400 for partial or non-cash flowing assets. All core asset classes in primary and secondary markets are underwritten with no minimum DCR or debt yield required at funding.
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After trading in a relatively tight range for many weeks, the 10 year T jumped 14 bps in 2 days as the tax bill passed the House, Senate, the House (again) and is now ready for signature (note that the bill most likely will be signed after New Year’s). The rise actually started with an allocation announcement by Germany regarding their bond issuance. Germany is the Euro zone’s benchmark bond issuer and they announced that they will borrow more in 2018, specifically by issuing more than expected long bonds (30 years in particular). This supply news caused a selloff in 10 and 30 year bonds in Europe, driving yields up internationally and domestically. With stronger than expected existing home sales in the United States combined with the final tax bill passage convinced investors that growth and deficits are on the horizon. The combination of expected events (tax bill) and unexpected (Euro announcement) proved to be volatile. All of this is exacerbated by end of year illiquidity as many institutions have filled their allocations and are winding down 2017. The movement spiked the 10 year yield past key technical levels including the October top of 2.46%, the next test is the March top of 2.62% (before the legislative dysfunction that slowed down policy movement). The next test for Washington is avoiding a government shutdown on Friday. Stay tuned. By David R. Pascale, Jr. , Senior Vice President at George Smith Partners
On December 18th, David Pascale was interviewed by Howard Kline, Esq. of CRE Radio to discuss the most recent December Fed meeting and rate hike. Click here to listen to the podcast.
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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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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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