$121,375,000, LIBOR + 0.98%

TRANSACTION OF THE WEEK!!!

$121,375,000, LIBOR + 0.98% Interest Only Floating Rate Loan for a Non-Contiguous 5-Property Retail/Power Center Portfolio - 30-Day Close: GSP arranged a $121,375,000 non-recourse interest only floating rate financing (63% loan-to-value) for a 5-property, approximate 1.4 million sq. ft. portfolio of retail/power center properties located on the West and East Coasts. Over the past several months, the lending community has been less inclined to provide financing for big box retail versus grocery/drug anchored, but given the strength of the markets and tenant mix, the dollar level and requested pricing were competitively bid upon by the market. Structure: The client retained GSP to obtain real estate-secured financing to pay-down an equivalent amount of unsecured, bank line debt essentially re-structuring the balance sheet of the company. An important consideration was to obtain secured debt with flexibility similar to that of the unsecured facility. Flexibility in prepayment, substitution of collateral, non-recourse, etc. were important considerations in selecting the secured debt provider. Properties: An approximate 1.4 million sq. ft. 5-property retail/power center portfolio - no grocery/drug anchored properties in portfolio; low vacancy sub-markets with excellent access to area CBD & transportation corridors; primarily late 1980's, early 1990's vintage. Terms: (1) Loan Amount: $121,375,000; (2) Loan-to-Value: 63%; (3) Interest Rate: LIBOR + 0.98%; (4) Amortization: Interest only; (5) Term: 4 years; Ability to substitute collateral with consistent debt coverage levels; (6) Prepayment: Locked to prepayment for 2 years, then open to prepayment with no penalty; (7) Recourse: Non-recourse except standard carve-outs to an entity; (8) Exit Fee: 0%; (9) Timing: Closed in 30 days; Lender Fee: 1.00%. (Gary E. Mozer, Lee T. Norman)

HOT MONEY

CTL Tenant Update: A major credit tenant lease lender recently announced that they are funding transactions based upon leases signed by Ralphs grocery chain. They are no longer requiring parent entities Kroger or Fred Meyer to sign or guarantee the leases. Reminder: CTL financing provides borrowers with maximum proceeds on single tenant transactions based upon the strength of the tenant. Loan term and amortizations are usually co-terminus with the lease term and underwritten to DCR's as low as 1.003 depending on the lease. "Hang-outs" (an amort. up to 5 years longer than the loan term) are available for certain transactions with the purchase of residual value insurance.

Attention Apartment Owners/FNMA Update: With the drop in Treasuries and the recent tightening in Fannie Mae spreads, an 80% LTV/1.20 DCR loan is priced at 7.95% as of today (known as Tier 2 pricing). Note that there are no additional fees to process Fannie Mae transactions through GSP.

REMINDER TO ALL 2000 GSP/A-T EXECUTIVE LUNCHEON SERIES PARTICIPANTS

Jack Kyser, Chief Economist for the Los Angeles County Economic Development Corporation, will be briefing attendees at Luncheon IV of the Series on Wed., August 9th. Look for a report in next week's Fin-Fax.