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| Volume VIII, No. 39 |
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October 6, 2000 |
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| KEY RATE INDICES |
FANNIE MAE RATES * |
| Prime Rate |
9.50% |
| 11th District |
5.509% |
| 3 Mo. T’s (YTM) |
6.24%
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| 6 Mo. T’s (YTM) |
6.31% |
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| 5 Yr. U.S. T’s |
5.91% |
| 7 Yr. US T’s |
??? |
| 10 Yr. US T’s |
5.81% |
| 30 Yr. US T’s |
5.84% |
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| LIBOR - 1 mo. |
6.62% |
| LIBOR - 3 mo. |
6.80% |
| LIBOR - 6 mo. |
6.76% |
| LIBOR - 1 yr. |
6.80% |
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| Tier 2+ (80% LTV) |
7.90% |
| Tier 3+ (65% LTV) |
7.75% |
| Tier 4+ (55% LTV) |
7.55% |
| 10 yr. term/30 yr. amort. |
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TRANSACTION OF THE WEEK!!!
$5,260,000 (86% Loan-To-Cost) for Self-Storage Facility in Carlsbad: GSP has arranged permanent financing on the newly repositioned Carlsbad Airport Self-Storage facility. Property Specs: 623 units, 71,240 rentable s.f., built in 1998 (originally 59,490 s.f.), well located. Our client, Guardian Storage Centers, a value added self-storage owner and operator, bought into an existing LLC in April of 2000 at 62 occupancy for $5,900,000 plus $250,000 in upgrades and marketing costs. In five months, they built out the remaining 12,000 s.f., raised occupancy to 92%, and raised rents from $0.96/s.f. to $1.25/s.f. GSP arranged financing with the following underwriting specs: (1) Lender funded a perm as soon as occupancy hit 92% with no historical operating history at that level; (2) Lender used actual vacancy of 8% instead of the usual 10%. Terms: (1) Rate: 10-year T + 2.60%; (2) Term/Amort: 10/30; (3) DCR: 1.25; (4) LTV: 75%; (5) Non-recourse; (6) Lender Fee: Par. (Michael Gottlieb) |
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| $6,000,000 for 50,000 s.f. All-Executive Suite Office Building in Orange County: This late 70's vintage, two-story office building is well located in an infill, low vacancy sub market. The property is operated by a leading executive suites company. However, the tenants lease directly with the building owner, an uncommon arrangement in the industry. GSP arranged financing with a portfolio lender who was able to value the property both as a standard office building and as an executive suites business. They "blended" the values in order get to borrower's loan proceeds requirement. Floor funding is $5,500,000 with an earn-out of $500,000 upon 12 months income at 1.30 DCR. The flexible, floating rate financing also allows the borrower to take advantage of rising rental rates. Terms: (1) Rate: 6-month LIBOR + 2.75%; (2) Term/Amort: 10/30; (3) LTV: 75%; (4) DCR: 1.30; (5) Non-recourse; (6) Prepayment: 2.0% yr. 1, 1.0% yr. 2, then open to prepayment at par; (7) Lender Fee: 1.0%. (Gary E. Mozer, Lee Norman, Gerald Price) |
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HOT MONEY!!!
Union Pension Fund Rolls Out Aggressive Mezzanine Fund for Construction or Substantial Rehab Projects With Funding Up to 98.5% of Total Costs: Union Pension Fund Advisor rolls out aggressive mezzanine financing program for projects using all union labor. Program is for both new construction and value added transactions with substantial renovation and repositioning. Leverage: Developer to fund 5% of the equity or mezz tranche, i.e. total leverage can be as high as 98.5% of total cost. Property Categories: Office, industrial, retail, multi-family and selective hotels. Transaction Size: $5 to $100 Million Pension Fund Investment Size: 10% to 30% of total project costs, not to exceed $15 Million. Structure: Investments will be structured through: (1) Direct equity investments, either as joint venture partner or limited partner (2) Participating second mortgages (3) Hybrid debt/equity structures. Maximum Loan to Value: 90% (when combined with first mortgage) Term: 3 to 5 years Payments: 1 to 3 years at interest only, amortizing over the remaining life of the investment Preferred Return: 8% to 10% Equity Participation: 30% to 75% Origination Fee: 1% Target Yield: 12% to 16% Hotels will be higher (in excess of 20%, and in most cases above 25%). Location: California, the Pacific Northwest, most parts of the Mid-west and Northeastern cities. Will do transactions elsewhere but expect that areas like Texas, Arizona and the Southeastern States will be difficult to do deals in. Expect to do transactions in the larger SMSA's. Approval: Advisor has discretionary approval.
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6TH ANNUAL GSP REAL ESTATE LUNCHEON
Wednesday, October 11, 2000
Keynote Speaker-MICHAEL MILKEN
SOLD OUT!!!
OVER 1,750 ATTENDEES!!!
We would like to thank the national real estate community for making this the "real estate networking event of the year"
On behalf of George & Pam Smith, Steven Hamermesh and the A-T Medical Research Foundation, we thank all of our Sponsors and Table Landlords for raising funds & awareness for A-T.
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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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