Arizona

GSP successfully placed $28,450,000 of acquisition financing on three limited service hotels. The assets were funded by two separate lenders and none were cross-collateralized. Two assets are in Arizona and one is in Florida. The non-recourse fixed rate financing represents 75% of the aggregate acquisition price and 68% of total costs including future Property Improvement Plan (PIP) dollars. All three loans are fixed for five years at 4.55%, amortized over 25 years. Challenge_:_ There was significant volatility in credit spreads during the time period between signed loan applications and loan closings for these CMBS transactions. Interest rate fluctuations impacted loan proceeds as these transactions were structured with tight underwriting parameters. The Borrower requested an alternative to defeasance as his prepayment option. Solution_:_ GSP’s daily interaction with numerous CMBS capital sources allows us to monitor spread movement across various lending platforms and proactively address potential re-pricing issues. Due to a combination of our meaningful ongoing relationships with the lenders and an aggressive posture to lock the all-in coupon, all three transactions were closed at the initial spreads quoted with no negative impact to proceeds. GSP was able to secure a yield maintenance prepayment option as opposed to the more standard defeasance requested by Wall Street capital providers.