George Smith Partners, Inc. Places Largest - FINfacts | George Smith Partners



Volume VIII, No. 34		August 25, 2000

KEY RATE INDICES

FANNIE MAE RATES *

Prime Rate	8.50%
11th District	5.357%
3 Mo. T’s (YTM)	6.29%
6 Mo. T’s (YTM)	6.35%

5 Yr. U.S. T’s	6.00%
7 Yr. US T’s	???
10 Yr. US T’s	5.72%
30 Yr. US T’s	5.67%

LIBOR - 1 mo.	6.62%
LIBOR - 3 mo.	6.64%
LIBOR - 6 mo.	6.81%
LIBOR - 1 yr.	6.95%

Tier 2+ (80% LTV)	7.81%
Tier 3+ (65% LTV)	7.66%
Tier 4+ (55% LTV)	7.46%
10 yr. term/30 yr. amort.


TRANSACTION OF THE WEEK!!! $15,200,000 Loan for Newly Constructed, 115,000 s.f. Grocery-Fitness Anchored Center on Subordinated Ground Lease: GSP placed the permanent debt for the construction loan takeout of an 11-tenant, 100% leased retail center in a prime "in-fill" location. The center is anchored by a 50,000+ s.f. grocery store and 40,000+ s.f. health and fitness center. The remaining tenants are a mixture of local and national businesses, including 5 restaurants. A majority of the lenders polled by GSP underwrote the subordinated ground lease expense, severely limiting proceeds. The funded loan was sized to an 80% LTV/1.25 DCR exclusive of the ground rent. GSP negotiated the following deal points with the lender: (1) Undeveloped lots within the center were excluded from the security allowing future development; (2) Subordinated ground rent was not underwritten in lender's cash flow model; (3) Lender assumed investment grade credit status for non-investment grade grocery anchor, netting a 4% overall vacancy factor; (4) Lender underwrote near term CPI bumps for certain non-credit in-line tenants; (5) All-in TI and LC reserves limited to $.41/foot inclusive of special purpose fitness center; (6) TI & LC reserves were underwritten but not escrowed. Terms: (1) Rate: T + 2.30%; (2) Term/Amort: 10/30; (3) LTV: 80%; (4) DCR: 1.25; (5) Non-recourse; (6) Lender Fee: Par. (David Stepanchak, George Smith)

George Smith Partners, Inc. Places Largest Mezzanine Loan in Company History!!! GSP has arranged a $19,800,000 mezzanine facility on a 100% leased, 5-building, approx. 400,000 s.f. R&D/office park in Northern California. The purpose of the loan was to take out a higher rate mezzanine loan that was put on at the time of the property acquisition. The new mezzanine financing is behind a CMBS senior loan and secured by a pledge agreement between the lender and the membership interest of the borrower's LLC. Terms: (1) Loan Amount: $19,800,000 - base funding of $18,000,000 with a reserve of $1,800,000 for tenant rollover. All other terms are confidential. (Gary E. Mozer, Peter Smyslowski)

$1,200,000 (80% of Project Cost) Construction Financing for 4 Spec. Homes in Tarzana: Our borrower is building 4 spec homes on a one acre parcel. The total project budget includes: (1) Pay off existing land loan (50% LTV); and (2) Construction of 4 spec. homes. The 2,500 s.f. "move-up" homes are fully entitled. Terms: (1) Rate: Prime + 1.25%; (2) Term: 12 months with 6 month option; (3) Amort: Interest only; (4) Lender Fee: 1.0%; (5) Partial release provisions; (6) Recourse. (Andrew Levant)

HOT MONEY!!! FNMA Update: Note that Tier 2 pricing (80% LTV/1.25 DCR) is at 7.81% fixed, 10 yr. term/30 yr. amortization.

SIGN-UP TODAY!!! 6th ANNUAL GSP REAL ESTATE LUNCHEON To Benefit the A-T Medical Research Foundation Wed., October 11, 2000 Century Plaza Hotel (Century City) Keynote Speaker: Michael Milken, The Milken Institute Individual tickets and Tables of 10 are selling fast!!! Don't miss out on the "Networking Event of the Year"…. For more information, call Steven Hamermesh at (310) 557-8336, ext. 123

SPEAKER'S CORNER George Smith will be moderating the Finance Panel at Real Estate Conference Group's "Apartment Outlook 2000 - The New Era in Apartments". Date: Mon., October 2, 2000; Location: Beverly Hilton Hotel (Beverly Hills). For more information, call (310) 285-5327 or go to www.realestateoutlook.com

* GSP is an L.A. correspondent for ARCS Commercial Mortgage, the nation's largest FNMA/DUS originator.

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