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| Volume VIII, No. 43 |
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November 3, 2000 |
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| KEY RATE INDICES |
FANNIE MAE RATES * |
| Prime Rate |
9.50% |
| 11th District |
5.548% |
| 3 Mo. T’s (YTM) |
6.39%
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| 6 Mo. T’s (YTM) |
6.36% |
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| 5 Yr. U.S. T’s |
5.85% |
| 7 Yr. US T’s |
??? |
| 10 Yr. US T’s |
5.82% |
| 30 Yr. US T’s |
5.86% |
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| LIBOR - 1 mo. |
6.62% |
| LIBOR - 3 mo. |
6.75% |
| LIBOR - 6 mo. |
6.70% |
| LIBOR - 1 yr. |
6.78% |
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| Tier 2+ (80% LTV) |
7.79% |
| Tier 3+ (65% LTV) |
7.64% |
| Tier 4+ (55% LTV) |
7.44% |
| 10 yr. term/30 yr. amort. |
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TRANSACTION OF THE WEEK!!!
$6,200,000 Perm for Fitness Center Anchored Retail Center in Los Angeles: A 31,000 s.f. health club/fitness center accounts for 63% of the income and net rentable area for this well located, 11 tenant, single-story property. Occupancy: 100%. The 10 remaining tenants are a mix of local businesses including 4 restaurants. Our borrower purchased the property 3 years ago and extensively renovated the center, including demising a small portion of the building to make room for additional parking. Challenges--Solutions: (1) Fitness anchor, non-credit (shadow rating: "junk"). Lender became comfortable due to the enormous success of this particular fitness center. It ranks in the top 10% of performers for the chain out of over 300 locations nationwide. It is so popular that even with the expanded parking lot, the fitness center negotiated an agreement with a local elementary school for evening parking; (2) Lender asked for tenant improvement reserve of $125,000 at closing, ramping up and capping @ $400,000 by year 5 - Borrower posted a $400,000 letter of credit at close in lieu of the reserve account; (3) Significant historic environmental issues--lender required environmental insurance. GSP arranged CMBS financing which included significant "cash-out" to the borrower who was able to recapture 100% of his equity. Terms: (1) Rate: 10 yr. T + 2.40%; (2) Term/Amort: 10/30; (3) LTV: 75%; (4) DCR: 1.30; (5) Non-recourse; (6) Lender Fee: Par. (David Stepanchak, George Smith) |
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| $2,000,000 Acquisition/Repositioning Financing for 2 Apartment Complexes in Beverly Hills: Property Specs: (1) Each complex contains 7 units: 4 1BR, 3 2BR; (2) Constructed in 1950's; (3) Rents are 40% below market. Reposition: Borrower plans to renovate all units including new tile, cabinets, bathroom fixtures, appliances, hardwood floors, etc. Common areas and landscaping are also being upgraded. Renovation and re-leasing expected to be complete within 6 months. Challenges: (1) During closing, one of the buildings had a fire and 3 units were damaged. GSP worked with the seller, the insurance company, and the Lender to facilitate an insurance settlement (including lost rent) to everyone's satisfaction while not slowing the process. (2) Borrower had declared personal bankruptcy during the last real estate downturn when faced with a large tax liability from depreciation recapture. Terms: (1) Pricing: 6 mo. LIBOR + 3.25%; (2) Loan to All-In Costs: 80% (includes purchase price, rehab costs, interest reserve, tenant buyout, fees, and closing costs); (3) Term/Amort: 7 years/interest only; (4) Prepayment: Yr. 1-1.0%, 0.5% thereafter; (5) Lender Fee: 1.0%; (6) Guarantees: Recourse to the borrower. (Michael Schwartz, Behzad Omid) |
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HOT MONEY!!!
Creative CMBS Lender Will Fund Future Cash Flow Today! This lender will underwrite deals using proforma cash flow extending out up to 6 months. This program is targeted at properties still in lease-up stage and approaching stabilization. Lender will fund a standard conduit loan based upon 1.20-1.25 DCR of the proforma income. How do they do it? The lender holds the loan "on book" for 6 months and then securitizes upon stabilization. Note: The property must underwrite to a 1.05-1.10 DCR based upon present income. Program Highlights: (1) Transaction Size: $2,000,000 to $10,000,000; (2) Property Types: Apartments, Industrial, Office, Retail, Mobile Home Park, Self-Storage; (3) Max. Loan to Stabilized Value: 75%; (4) Term/Amort: 10/30 (5) Pricing: Standard + 15 bps.; (6) Lender Fee: Par; (7) Non-recourse.
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HOT MONEY!!!
Need to close by year-end? Do you want certainty? There are less than 40 business days left in 2000. GSP/Rifkind Capital Advisors can close your transaction with certainty before December 31st. Program Highlights: (1) Geographic: Nationwide; (2) Investment Size: Min. $2,000,000; (3) Minimal Due Diligence: Usually no third party reports nor legal fees required; (4) Non-recourse and no prepayment penalty. For more information, contact David Rifkind (ext. 111, drifkind@gspartners.com) or David Ellis (ext 109, dellis@gspartners.com)
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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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