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| Volume VIII, No. 36 |
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September 15, 2000 |
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| KEY RATE INDICES |
FANNIE MAE RATES * |
| Prime Rate |
9.50% |
| 11th District |
5.456% |
| 3 Mo. T’s (YTM) |
6.13%
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| 6 Mo. T’s (YTM) |
6.20% |
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| 5 Yr. U.S. T’s |
5.91% |
| 7 Yr. US T’s |
??? |
| 10 Yr. US T’s |
5.84% |
| 30 Yr. US T’s |
5.90% |
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| LIBOR - 1 mo. |
6.62% |
| LIBOR - 3 mo. |
6.66% |
| LIBOR - 6 mo. |
6.77% |
| LIBOR - 1 yr. |
6.84% |
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| Tier 2+ (80% LTV) |
7.89% |
| Tier 3+ (65% LTV) |
7.74% |
| Tier 4+ (55% LTV) |
7.54% |
| 10 yr. term/30 yr. amort. |
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TRANSACTION OF THE WEEK!!!
$8,500,000 (80% Loan-To-Cost) Acquisition Financing for 90,000 s.f. Office Building in Anchorage, Alaska: This 1983 built, mid-rise, approximately 90% occupied, Class "A" office building contains several high profile national companies among its approximately 20 tenants. These offices serve as the Alaska headquarters for most of these tenants. The property is well located in the heart of Anchorage and is surrounded by office, retail and restaurants and features excellent views. In addition to a parking lot for 70 cars, there is also a 110 space heated parking. The loan was structured as an $8,050,000 floor funding and a $450,000 earn out based upon new leasing within nine months of closing. Swap Based Pricing: The fixed rate was determined as follows: 10 year T + 10 year mid-market Swap + 1.24% (risk spread). At the time of application, the Swap spread was 1.22%. The lender mitigated some of the market fluctuation risk or benefit to the borrower as follows: The difference between the Swap spread at application (1.22%) and difference at rate lock was multiplied by 0.75% and then added or subtracted to 1.22% in order to determine the final swap spread. In this case Swaps moved up to 1.27% at rate lock, but the lender used a 1.26% spread due to the formula. Terms: (1) Pricing: T + 2.50%; (2) Term/Amort: 10/30; (3) LTC: 80%; (4) DCR: 1.30; (5) Non-recourse; (6) Lender Fee: Par; (7) Earn-Out: $450,000. (Gary E. Mozer, Gerald Price) |
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| $3,060,000 Rehab Financing for 28 Units - The 1st Phase of a Major Renovation and Repositioning of a 700+ Unit Project Built in the Mid-1950's: With the apartment deficit in many prime Southern California communities and where the costs of new developments are $150,000/unit or more, many of our developer clients are combing through "vintage properties", typically 40 to 50 years old, that are candidates for major redevelopment. We are not talking about cosmetic upgrades being done on the 10 to 20 year old projects. Project Overview: An early 1950's vintage, 700 unit, 99% leased, 30 acres, non-gated, 35 separate legal parcels with public streets and alleys. The project is unique with its low density because most of the projects in the area are 4-story buildings with parking structures or subterranean parking. Unit mix is approximately 50/50 between 1 & 2 bedrooms. Individual units already had varnished hardwood floors in the living rooms, enclosed kitchens with their own exterior entrees, tile countertops and porcelain fixtures. Repositioning Program: Expansion of most 1st floor 1 bedroom units into 3 bedroom/2 bath units; addition of enclosed patios or balconies, upgraded electrical capacity and internet accessibility; new carpets, etc. Construction Budget: In excess of $55,000/unit. Terms: (1) Amount: $3.060.000 ($109,285 per unit; 100% of development costs, soft costs and retirement of existing debt; (2) Rate: 6-month LIBOR + 3.00%; (3) Term: 5 years; (4) Amort: 25 years; (5) LTV: 75%; (6) Prepayment: 1.0% during year 1, pre-payable at par thereafter; (7) Non-recourse; (8) Lender Fee: 1.0%. (George Smith, David Stepanchak) |
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SPEAKER'S CORNER
GSP's George Smith will be the moderator of "Shopping the Capital Markets: The Leading Sources of Debt & Equity" at Commercial Property News' 6th Annual "Southern California Property Opportunities" Conference, on October 3rd at The Beverly Hilton in Los Angeles: Co-sponsored by LACRA, the local chapter of NAIOP and 19 leading local firms, the full-day networking conference features eight diverse panels and over 40 prominent speakers. Other topics to be covered include "Southern California's High-Tech Industry: Dot-com or Dot-gone?", Leasing, Investment and Development Trends in Office and Industrial property, updates on the Southern California Investment and Development markets, and "The Impact of Technology on the Real Estate Building Industry." Please call CPN Conference Manager, Wendi Weisgarber, at (212) 615-2983 for more information or to register -or- consult www.cpnrenet.com to register on-line.
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6TH ANNUAL GSP REAL ESTATE LUNCHEON
Wednesday, October 11, 2000
Keynote Speaker-MICHAEL MILKEN
- 1,337 Attendees and Climbing… rapidly!!!
- 26 Days and Counting
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New Table Landlords/Sponsors: Archon Financial, CBIZ Valuation Counselors, Fremont Investment & Loan (2nd Table of 10!), Grove Investment Co., Imperial Credit Bank, JARCO/SLG&G, LLC, Loeb & Loeb LLP, Milken Institute, Morgan Stanley Real Estate Fund, Tuttle & Taylor, Wells Fargo Bank.
For information on tax-deductible Tables of 10 or individual seating, contact Steven Hamermesh (ext. 123).
For more information about the A-T Medical Research Foundation click here.
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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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