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| Volume VIII, No. 49 |
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December 22, 2000 |
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| KEY RATE INDICES |
FANNIE MAE RATES * |
| Prime Rate |
9.50% |
| 11th District |
5.589% |
| 3 Mo. T’s (YTM) |
5.26%
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| 6 Mo. T’s (YTM) |
5.51% |
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| 5 Yr. U.S. T’s |
4.89% |
| 10 Yr. US T’s |
5.01% |
| 30 Yr. US T’s |
5.39% |
| 12-MAT |
6.128% |
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| LIBOR - 1 mo. |
6.65% |
| LIBOR - 3 mo. |
6.45% |
| LIBOR - 6 mo. |
6.23% |
| LIBOR - 1 yr. |
6.00% |
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| Tier 2+ (80% LTV) |
7.06% |
| Tier 3+ (65% LTV) |
6.91% |
| Tier 4+ (55% LTV) |
6.71% |
| 10 yr. term/30 yr. amort. |
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TRANSACTION OF THE WEEK!!!
$8,400,000 Acquisition/Reposition Financing (85% of Total Project Cost) for 77,000 Sq. Ft. Retail Center in Orange County: This 23 tenant, 100% occupied center is anchored by a 30,000 s.f. discount store. The remaining tenants are a mix of local and regional chain businesses including restaurants, a gas station and a 6,000 s.f. auto parts store. The property was originally developed in 1955 and underwent renovations in 1976 and 1989. Our borrower's business plan includes a significant renovation including: new landscaping, painting, roof repairs, parking lot repairs, enlarging the gas station "pad", new signage, new lighting. He also plans to re-tenant much of the center. GSP arranged floating rate financing with a national financial institution which will also provide a permanent mortgage upon stabilization. The loan is structured with a holdback to pay for the renovation, tenant improvements, leasing commissions, etc. Total Project Cost: $9,900,000. Financing Terms: (1) Pricing: LIBOR + 3.00%; (2) Term/Amort: 2 years/interest only, with one 6 month extension; (3) Recourse: Top 20% of the loan only; (4) Loan-To-Cost: 85%; (5) DCR: 1.20 at funding, 1.25 at stabilization; (6) Lender Fee: 1.0% (1.0% exit fee will be waived if lender provides perm. The perm will be completely non-recourse). (Gene Brunkhardt, Gary E. Mozer) |
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| $7,350,000 (85.00% of Cost) Interim Loan for the Conversion of a 110,000 Sq. Ft., 1960's Vintage Retail Center to an Office Call Center: The loan features an earn out of $750,000 which will bring the total capitalization to 95.00% of cost (not to exceed 80% LTV). GSP arranged floating rate financing, funding 39 days after application. The aging retail property is located in a mature neighborhood within a major Southern California city. Business Plan: Borrower executed a 20-year NNN office lease with a major computer support center, provided the building to the tenant "as-is". Tenant has done approximately $10,000,000 in improvements. Breakdown at Stabilization: 98,000 s.f, office/12,000 s.f. retail (to be leased). Terms: (1) Pricing: 30-day LIBOR + 2.50%; (2) Term/Amort: 1 year w/one 6 month extension, interest only; (3) DCR at Funding: 1.00, DCR at Stabilization: 1.30; (4) Non-recourse; (5) Lender Fee: 0.75%, (0.25% exist fee to be waived if lender provides perm). (Gary E. Mozer, Peter Smyslowski) |
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George Smith will be speaking at the law firm of Buchalter, Nemer, Fields & Younger regarding commercial real estate financing. Date: Mon., January 8, 2001; Time: 12:00 p.m. |
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Interest Rate/CMBS Update: Economic fears, a flight to quality, the Fed's change in bias, have driven the 10 year T to 5.01%, a 20-month low. Watch for major volatility next week as very few bond traders will "run the show." Floor rates (typically 7.25% for apartments, 7.50% for commercial) are in place industry wide. Many life companies are following suit and instituting minimum all-in rates, more on this in a future Fin-Fax©. Attention Apartment Owners: Note that Fannie Mae does not "floor" rates, see pricing above. There is no extra charge to process Fannie Mae transactions with George Smith Partners.
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HAPPY HOLIDAYS FROM GEORGE SMITH PARTNERS, INC. TO ALL OF OUR CLIENTS, LENDERS, VENDORS AND ALL OUR FAITHFUL FIN-FAX© READERS
HERE'S TO A PROSPEROUS 2001!!!
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| * GSP is an L.A. correspondent for ARCS Commercial Mortgage, the nation's largest FNMA/DUS originator. |
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