$60,000,000 Bridge Loan

TRANSACTION OF THE WEEK!!!

$60,000,000 Bridge Loan for the Acquisition of the California Apparel Mart By The Hertz Group: GSP has arranged its 4th financing transaction for The Hertz Group, the acquisition financing for the California Apparel Mart. The Property: The California Apparel Mart is the largest building serving the vibrant Los Angeles apparel /fashion community, totaling approximately 3,000,000 sq. ft. catering to national manufacturer showrooms, the Fashion Institute, service facilities, banquet rooms and trade show exposition rooms. The Acquisition and the Challenges: The Hertz Group acquired the property from Lend Lease, one of the world's largest full-service real estate investment and finance companies. The property had been owned by a Lend Lease subsidiary, as successor to The Equitable, which foreclosed on the property in 1995 and at one time had approximately $250,000,000 in debt. The property is approximately 40% vacant, a classic value-added opportunity which fits the profile of The Hertz Group. The Hertz Group is known for its ability to work with its tenants, making responsive "hands on" decisions and move quickly in implementing turn around strategies. A Fast Track Acquisition of a Highly Complex Purchase: The "fast track" due diligence process required the investor work in parallel with The Hertz Group as materials were made available. The 3rd party reports and MAI appraisals were ordered before the financing was committed. The Hertz Group's ability to gain control of the asset included their credibility as one of the major landlords in downtown Los Angeles, their track record in successfully turning around other buildings and their ability to accommodate the seller's desire for a fast close. The transaction closed in approximately 30 days from opening of escrow. Financing Terms: The purchase price as well as the financing terms are subject to a Confidentiality Agreement. The Hertz Group: Reference is made to a Los Angeles Times business article on June 6th (which can be pulled off the LA Times web site), profiling The Hertz Group. Prior GSP transactions for The Hertz Group include two CMBS refinances (a Jewelry Mart in Downtown Los Angeles and the Ralph's market that is part of the Wiltern Theatre complex) and a hotel acquisition in Reno, Nevada. (Mike Gottlieb, Henry Bryan, George Smith)

$3,200,000 2nd Mortgage Construction Loan (Part II of a Two-Part Financing), Non-Recourse, 10-Year Term for Southern California Grocery/Drug Anchored Shopping Center: A Ralphs/Rite-Aid (formerly Thrifty) anchored center built in 1961and being repositioned. The anchors have occupied the center since 1964. There are 11 "in-line" tenants; a mix of local businesses, including 3 restaurants. Phase II Construction: $3,200,000 for major renovations including: (1) Expansion of the Ralphs who is building their own building from 30,000 to 52.000 s.f.; (2) rehab of the façade, parking lot and landscaping. The construction loan provides 100% of the rehab costs. Phase I Land Acquisition: Last Fall GSP arranged a Phase I loan of $5,000,000 to purchase the fee simple interest from Catellus as successor to Southern Pacific Railroad (100% of cost, 56% LTV where the ground lease only had 18 years remaining). Terms: (1) Rate: 10-year CMT + 2.25% (yr. 1 is fixed at 8.00%, thereafter reset quarterly); (2) Term/Amort: 10/25; (3) LTV: 65%; (4) DCR: 1.40; (5) Prepayment Penalty: 1% in yrs. 1-3, par thereafter; (6) Non-recourse; (7) Lender Fee: Phase I: Par, Phase II: 1 pt. (George A. Smith, Michael Schwartz)

SPEAKER'S CORNER

George Smith will be speaking to the attorneys of Dewey Ballantine, discussing the current capital markets environment as it pertains to commercial real estate finance. Date: Tues., June 27th; Time: 11:45 a.m. Contact Jim Neuman (GSP's Director of Business Development), ext. 106, if you are interested in similar presentations by Mr. Smith or other senior members at GSP.