CMBS Lender Offering Fixed Rate

TRANSACTION OF THE WEEK!

$4,200,000 Construction/Mini-Perm for Full Service Gas Station: Located in a fast growing Northern L.A. County community, this nationally-branded facility is extremely well located with current traffic volume on the corner in excess of 70,000 cars daily and projected to reach 181,000 in 2 years. Competition in the area is extremely limited due to limited available land and entitlement factors. The 79,000 s.f. parcel will include a full service station with: (1) 11 multi-purpose pumps; (2) diesel fuel; (3) pay at pump option; (4) convenience store with scanners, computerized inventory reconciliation; (5) gourmet coffee stand within the store; (6) full-service hand car wash including detailing, (7) quick-lube facility. GSP marketed the transaction to several lenders, only one of which offered "one-stop shopping" and 70% loan to construction cost financing (the next best quote was 65% loan to cost, most were at 60%). Although the borrower is an experienced operator of these types of facilities, this is one of the first projects they are developing ground up. Terms: Construction: (1) Rate: Prime + 1.50%; (2) Term/Amort: one year/interest only; (3) Loan-to-Cost: 70%; (4) Recourse; Mini-Perm: (1) Rate: 6-month LIBOR + 4.00%; (2) Term/Amort: 10/25; (3) Loan-to-Value: 70%; (5) DCR: 1.40; (6) Non-recourse; (7) Prepayment: 2.0% yrs. 1-2; 1.0% yrs. 3-5, prepayable at par thereafter; (8) Lender Fee (total for both loans): 1.5%. (Lee Norman, David Rifkind)

HOT MONEY!

CMBS Lender Offering Fixed Rate Financing With First 7 years at Interest Only The maximum LTV for this program is 70%. Transactions are underwritten with standard CMBS guidelines and pricing. Eligible product types include multifamily, office, industrial, retail. The lender is limiting the program to conforming, stabilized properties. Structure: Fixed rate over treasuries, 10 year term. Amortization: yrs. 1-7/interest only, yrs. 8-10/22 year amort. This program is ideal for borrowers seeking to maximize cash flow with no rate risk.

Interest Rate/CMBS Update: Bonds: The 10 year T reached a 2 year high yesterday at 6.18%. Factors: (1) Yesterday’s retail sales report (excluding autos) increase was 3 times predictions, leading to a massive sell off in the bond market due to inflation fears, (2) Today’s PPI increase was "off the charts" 1.1%, the largest increase in 9 years, (3) Greenspan’s dour warning to US Banks on Thursday to set aside more cash as insurance against a big market downturn. He again voiced concern about a "bubble" in equity prices. The bond market actually rallied today after a "flight to quality" from a tumbling stock market, the Dow Jones index dropped over 2.5% of today. The 10-year T closed at 6.08%. CMBS: A quiet week with 10 year AAA’s opening at approximately + 135 in secondary market trading as buyers continue to prefer pools with some seasoning over new issues (latest new issue priced at +143.5). Institutional buyers’ appetite for CMBS will be spotty at best for the rest of the year. Many IB’s indicate that the year ends at Thanksgiving as far as new issuance. What’s Coming Up? A $800,000,000 pool of defunct originator Nomura’s remaining loans, a $2 billion floating pool from a major IB made up of several large high profile loans and two standard fixed rate pools in the $750 million range. Stay tuned….

Congratulations From GSP On The Wedding of
Rose and Steven Hamermesh

When: Oct 17, 1999; Where: Beverly Hills, CA. All of the more than 1,600 attendees to the 5^th Annual GSP/A-TMRF Real Estate Luncheon on Nov. 3^rd received wedding invitations as a special bonus. Due to the size of the crowd, no family members will be attending and the ceremony will be held in shifts of 320. Keynote speaker will be George Smith.