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| Volume VIII, No. 46 |
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December 10, 1999 |
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| KEY RATE INDICES |
FANNIE MAE RATES * |
| Prime Rate |
8.50% |
| 11th District |
4.666% |
| 3 Mo. T’s (YTM) |
5.27%
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| 6 Mo. T’s (YTM) |
5.58% |
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| 5 Yr. U.S. T’s |
5.98% |
| 7 Yr. US T’s |
6.03% |
| 10 Yr. US T’s |
6.07% |
| 30 Yr. US T’s |
6.17% |
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| LIBOR - 1 mo. |
6.46% |
| LIBOR - 3 mo. |
6.12% |
| LIBOR - 6 mo. |
6.09% |
| LIBOR - 1 yr. |
6.31% |
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| Tier 2+ (80% LTV) |
7.80% |
| Tier 3+ (65% LTV) |
7.65% |
| Tier 4+ (55% LTV) |
7.45% |
| 10 yr. term/30 yr. amort. |
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TRANSACTION OF THE WEEK
$29,600,000 (80% Loan-to-Cost) Uncovered Construction Loan for a Major Mixed Use Redevelopment Project Located at Hollywood Blvd. and Western Ave: The mixed-use development will consist of: (1) 120,500 s.f. of retail (including 2 pre-leased anchors: a 46,100 Sq. Ft. Ralphs grocery store and a 28,160 s.f. Ross Dress for Less), and (2) a 4-story, 100 unit, senior citizen apartment complex. Layout: One level of subterranean parking, levels 1-2: retail, levels 3-6: senior housing. Hollywest Promenade is being built at a total cost of $37,000,000. The development is being financed by one of the leading construction lending banks in the nation. The lender demonstrated an unparalleled entrepreneurial understanding of this multi-faceted development, which required them to bank a "put" from the Los Angeles Community Redevelopment Association (CRA). The Put: Upon certificate of occupancy, the CRA will purchase the senior’s housing complex at a predetermined price under the terms of an owner participation agreement. The CRA will then sell the complex to a national non-profit senior housing operator. Terms: (1) Loan Amount: $29,600,000; (2) Loan-to-Cost: 80%; (3) Loan-to-Value: 75%; (4) Term: 2 years plus two 6-month options, interest only; (5) Pricing: LIBOR based; (6) Lender Origination Fee: 1%; (7) Other Terms: Borrower was required to purchase a two-year cap on 30-day LIBOR. GSP engaged an interest rate management broker to purchase and negotiate the LIBOR cap. His job was to scour all institutions to find the best price available for this interest rate management derivative. Our borrower saved over $23,000 by engaging said broker. (Gary E. Mozer, Peter Smyslowski)
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| $10,000,000 Credit Facility for 938 Room Full-Service Reno Hotel/Casino: GSP has placed an asset based credit facility for a 938 room hotel/casino in downtown Reno. The hotel experienced a significant performance downturn due to casino overbuilding in 1995, but has shown a positive rebound as a result of management changes and improving economic conditions. The loan at $10,660/room is substantially below replacement cost and was sized based on a multiple of actual EBITDA. Use of Proceeds: Retire maturing debt and increase working capital. Collateral: Assignment of cash accounts, receivables, FF&E and real property. Terms: (1) Fixed at 10.75%; (2) 5 year term; (3) Interest only; (4) 1.5 pts. to lender; (5) 360/360; (6) Rate reduction to 10% subject to financing of companion property; (7) Prepay @ 3, 2¼, 2, 1½, 1; (8) Sizing: EBITDA multiple of: Yrs. 1-2 @ 3.5 x EBITDA, Yr. 3 @ 3.0, Yr. 4 @ 2.75, Yr. 5 @ 2.5. (Henry Bryan, Michael Gottlieb, George A. Smith) |
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GSP/RIFKIND CAPITAL ADVISORS UPDATE
Only 13 business days left in 1999!
$35,000,000 Available for Year-End Closings…..
Use GSP/Rifkind’s quick-close capability to create value in your transaction. For more info., contact David Rifkind (ext. 109, drfkind@gspartners.com) or David Ellis (ext. 216 or dellis@gspartners.com)
For more information on GSP/Rifkind Capital Advisors’ lending programs, please contact David Rifkind (ext 109, drifkind@gspartners.com) or David Ellis (ext 216, delis@gspartners.com)
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HOT MONEY!
LifeCo Specializing in Single-Tenant or Owner/User (Not Only Credit Tenants): Still have $50-60 million to put out, T’s + 200, 360/360 (could go lower based on quality of tenant and underwriting). They are looking for single-tenant or owner/user properties where the tenant has good financial statements, demonstrated profitability and strong core operating business with favorable outlook. Office and industrial. No multi-tenant. GSP arranged the refinance of an highly specialized manufacturing/distribution facility consisting of an eclectic mix of contiguous buildings for a privately held company earlier this year. |
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SPEAKER’S CORNER
Soboroff & Rosenfelds’s RETAILGAME (ICSC) on Dec.16th @ Century Plaza Hotel. George Smith will moderate the financing panel at this fast paced and exceptional one-day event. Program includes panels covering: (1) Developer Strategies discussed by 8 industry leaders; (2) 10 Sub-Market Outlooks with leading commercial brokers from each market; (3) Future Retailing Trends "including the Internet’s virtual mall" discussed by 6 national retailers; (4) Political Issues (Governor Gray Davis and Mayor Richard Riordan); (5) The Next Generation of Real Estate Finance, and (6) the ever popular and productive Deal Making Mall in the afternoon. For registration information go to www.icsc.org |
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| * GSP is the exclusive L.A. correspondent for ARCS Commercial Mortgage, the nation's largest FNMA/DUS originator. |
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