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| Volume VIII, No. 35 |
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September 1, 2000 |
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| KEY RATE INDICES |
FANNIE MAE RATES * |
| Prime Rate |
9.50% |
| 11th District |
5.456% |
| 3 Mo. T’s (YTM) |
6.26%
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| 6 Mo. T’s (YTM) |
6.31% |
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| 5 Yr. U.S. T’s |
5.90% |
| 7 Yr. US T’s |
??? |
| 10 Yr. US T’s |
5.68% |
| 30 Yr. US T’s |
5.66% |
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| LIBOR - 1 mo. |
6.63% |
| LIBOR - 3 mo. |
6.67% |
| LIBOR - 6 mo. |
6.80% |
| LIBOR - 1 yr. |
6.92% |
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| Tier 2+ (80% LTV) |
7.78% |
| Tier 3+ (65% LTV) |
7.63% |
| Tier 4+ (55% LTV) |
7.43% |
| 10 yr. term/30 yr. amort. |
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TRANSACTION OF THE WEEK!!!
$19,750,000 ($113/Sq. Ft.) 78% of Total Cost Acquisition/Reposition Loan for a 2-Building (Plus Retail Land Parcel) Garden-Style Office Complex - 26 Day Close: GSP has arranged a $19,750,000 non-recourse acquisition/reposition loan for an approximate 175,000 sq. ft. 2-building (plus excess retail land parcel) office complex located in Southern California - a $113/sq. ft. loan amount on garden-style office. The transaction timing was 26 days from application to closing. Structure: The total project cost (including closing costs, interest reserve, deferred maintenance, and leasing costs) was approximately $25,350,000, and the loan amount was $19,780,000 - 78% Loan-to-Cost. Approximately $2,500,000 of leasing costs were held back from the loan proceeds, as the business plan of the client is to roll the under-market rents (average in-place rents were 20% below market) upon tenant lease expiration. One tenant occupied approximately 25% of the space and was scheduled to vacate prior to the end of the year. Additionally, there was a total potential roll-over exposure of 90% in the first 2 years. Therefore, the lender held-back approximately $250,000 as an interest reserve. The interest reserve will be released to the borrower once the property reaches a 1.20 DCR after rollover has been mitigated. An undeveloped retail parcel, adjacent to the office buildings, was part of the collateral. Therefore, a release mechanism was established to provide the flexibility to sell or develop the parcel. Property: Approximately 175,000 sq. ft., 2-building office complex; low vacancy submarket with excellent access to area CBD & transportation corridors; mid to late 1980's construction; cast in-place concrete walls and exterior glass. Financing Terms: (1) Loan Amount: $19,750,000; (2) Rate: 30-day LIBOR + 2.90%; (3) Term: 3 years; (4) Amort: Interest only years 1-2, then 30 year amortization; (5) Prepayment: Locked year 1, then open to prepayment with no penalty; Prepayment Releases - For land parcel, greater of $800,000 or 100% of net sale proceeds. For either building, greater of 125% of allocated loan amount or 100% of net sale proceeds; Reserves - $0.24/sq. ft. capital reserve/year, first $200,000 of cash flow to build leasing reserve, but no replenishment afterwards (this was done so that initial funding amount was higher); (6) Lender Fee: 1.00%; (7) Exit Fee: 1.00%; (8) Non-recourse except standard carve-outs. (Gary E. Mozer, Lee T. Norman) |
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| $3,600,000 Refinance for Save Mart/Rite Aid Anchored 82,300 Sq. Ft. Shopping Center in Tertiary Location - This CMBS loan closed in 41 days from Application to Funding: This 95% occupied, 11 tenant, mid-80's vintage shopping center includes a 30,000 s.f. grocery store, 17,000 s.f. drug store, a Laundromat and 4 fast food restaurants. Challenges: (1) Both Rite Aid and Save Mart have average sales; (2) Small town trade area in San Joaquin Valley - 17,000 population; (3) Existing loan was near maturity; (4) All new 3rd party reports had to be obtained; (4) Built in 1984, the property required a roofing reserve - the lender agreed to an increase in the loan amount of $100,000 to pay for roofing repairs to be completed immediately after closing. Terms: (1) Loan Amount: $3,600,000; (2) Rate: 10 yr. T + 2.30%; (3) Term/Amort: 10/30; (4) Loan-To-Value: 74%; (5) DCR: 1.34; (6) Non-recourse; (7) Lender Fee: Par. (Gene Brunkhardt) |
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| $2,132,500 Acquisition Loan For 74,660 Sq. Ft. Industrial Complex in Rancho Dominguez, CA - Portfolio lender Closed in 45 Days from Application to Funding: Requirements: (1) Borrower needed a fast closing to take advantage of an opportunity; (2) Secondary financing due to the structure of the borrower's investment group; (3) No personal recourse. The 20 year old property is a 15 tenant industrial incubator project which is 100% occupied and has a history of high occupancy. About 25% of the property is built out as office or retail use. Over 50% of the leases are turning in the first 12 months and another 35% are turning in the next 12 months. Current rents average $.50 psf. Market rents for similar type tenants: $.70 psf. Terms: (1) Loan Amount: $2,132,500; (2) Rate: 12 MAT + 3.00%; (3) Term/Amort: 10/25; (4) Loan-To-Value: 50%; (5) DCR: 1.40; (6) Recourse to borrowing entity only (no "warm body"); (7) No prepayment penalty; (8) Lender Fee: 0.75%; (9) Secondary financing from a private entity was allowed to meet the borrower's request. (Gene Brunkhardt) |
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6TH ANNUAL GSP REAL ESTATE LUNCHEON
Wednesday, October 11, 2000
- 1,175 Attendees and Climbing… rapidly!!!
- 40 Days and Counting
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New Table Landlords/Sponsors: Commercial Property News, EJM Development Co./Anvil Financial, First Union Capital Markets (2nd Table of 10!), Fulbright & Jaworski, L.L.P., GE Capital Corp. (2nd Table of 10!), The Johnston Group, KeyBank, Los Angeles Business Journal, Mindlin Real Estate Group, Secured Capital Corp., Solomon Ross Grey & Co.
For information on tax-deductible Tables of 10 or individual seating, contact Steven Hamermesh (ext. 123)
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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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