Expanding Bank Rolls Out Nationwide

TRANSACTION OF THE WEEK!

$24,107,000 Interim Loan (85% Loan-to-Cost/80% Loan-to-Stable Value) for 522,811 Sq. Ft., 95% Occupied, 21 Building Industrial Park Acquisition in Western U.S.: GSP arranged $24,107,000 of floating rate, interim financing to facilitate the acquisition of a 95% occupied, 522,811 sq. ft., 21 building industrial park located in a top 10 market (by population) in the Western United States. Subject: 21 non-contiguous buildings on 39 acres consisting of 17 free-standing single-tenant industrial buildings, 2 distribution buildings, 1 multi-tenant light industrial building and 1 multi-tenant office building; 522,811 total sq. ft. with individual buildings ranging from 12,000 sq. ft. to 58,000 sq. ft.; built 1974 to 1991; 33% average build-out with 16’ clear heights. Business Plan: The client sought to maximize the senior financing on a floating rate basis. This allows the client flexibility to sell-off the multi-tenant office building (not in-line with client’s core portfolio) and some of the single-tenant buildings to owner/users (at pricing premiums), raise below market rents and achieve maximum proceeds upon stabilization. The required immediate capital expenditures and 3 years of tenant improvement & leasing commissions totals $1,000,000. Financing Terms: (1) Loan Amount/LTV: $24,107,000 or 85% loan-to-total project cost (including closing costs, 2 years of tenant improvement & leasing commissions of $250,000, and immediate capital repairs of $160,000) and 80% loan-to-stabilized value; (2) Term/Amort: 3 years/interest only; (3) Rate/DCR: 30-day LIBOR + 3.25%, with quarterly debt coverage ratio tests – Year 1 minimum 1.15 DCR, Year 2 minimum 1.25 DCR, Year 3 minimum 1.30 DCR . In the event the DCR falls below the minimum during the preceding 3 months, lender sweeps all net cash flow until DCR hurdle is achieved; (4) Re-tenanting Reserves: Monthly tenant improvement & leasing commission impound of $20,000/month over and above the $250,000 at closing for the term of the loan; (5) Prepayment: Months 0-12: locked, months 13-24: 0.50%, months 25-30: 0.25%, open thereafter; (6) Non-recourse; (7) Lender Fee: 1.25%. (Gary E. Mozer, Lee T. Norman)

Senior Vice President Mike Gottlieb has re-established a GSP presence in Orange County. Mike is now available to better serve our Orange County clients and lenders. Mike can be reached at:

3184-J Airway Avenue
Costa Mesa, CA 92626
Phone (714) 546-3465 Fax (714) 546-3517
email: mgottlieb@gspartners.com

Expanding Bank Rolls Out Nationwide "One Stop Shop" Construction/Perm Program for CTL: Developers can fix their permanent rate before construction and get up to 90% of cost financing. This program is geared towards single tenant, investment grade properties (S&P: "BBB" or better). In a typical transaction, the lender will underwrite a fixed rate perm and add the construction period to the permanent loan term. Upon completion the loan changes from interest only to a typical perm with amortization, interest rate is fixed from pre-construction. The loan is recourse during construction, non-recourse during the perm. Single closing process, one set of loan docs, 1.0% total lender fee. Available terms/amorts. include 10/30, 15/15, 20/20, etc.

Congratulations to GSP’s Mitch Simon and His Wife Helen: Last week, Helen and Mitch welcomed a beautiful baby girl to their growing family. Mom is resting comfortably, dad is back running our back room operation where all the famous GSP "blue books" are put together. Terms: (1) Name: Kennedy Amory Simon; (2) Weight: 8.4 lbs; (3) Length: 20 inches; (4) Birthdate/Time: 10/20/99, 6:34 a.m.

SPEAKER’S CORNER: Tues., November 9^th - George Smith will be a featured speaker in the Real Estate Financing Panel at Growth Capital Conference II, held at the DoubleTree Hotel, Orange County Airport. For more info., call (310) 397-8899.