Portfolio Lender Funding Non-Recourse

TRANSACTION OF THE WEEK!!!

$44,000,000 (80% LTV/1.20 DCR) Construction/Take-Out for 300,000+ s.f. Big Box Power Center at 8.10%: This is the 13^th funding arranged by GSP for our client, a well-known regional developer.  The Property: (1) Located in Los Angeles County (high-end demographics), dense in-fill location with extreme physical and political barriers to entry; (2) Built in 1998, by our client, with last tenants taking occupancy in early 2000; (3) 16 tenants, occupancy: 98.5%; (4) 5 credit tenants occupy approx. 185,000 s.f.; none of which are grocery/drug. Challenges/Solutions: (1) Timing was critical: A construction call was looming in early May, loan closed in 6 weeks from application; (2) GSP negotiated: (a) interest only amortization for year 1, and; (b) No loan servicing charges, thereby saving the borrower 3-5 basis points annually; (3) Borrower took advantage of an early free rate lock provision during a period of capital markets volatility, Note: Rate, spread, and loan dollars were all locked two weeks prior to closing; (4) Lender underwrote to a 1.20 DCR, maximizing loan proceeds, allowing the borrower to recapture $4,000,000 in equity.  Terms:  (1) Rate: 8.10%; (2) Term/Amort: 10/30 (Yr. 1: Interest only); (3) DCR: 1.20; (4) LTV: 80%; (5) Non-recourse; (6) Lender Fee: Par.  (Gary E. Mozer, Peter Smyslowski)

HOT MONEY!! 

Portfolio Lender Funding Non-Recourse, Interest Only, Floating Rate Transactions: This lender offers a “smorgasbord” of options for borrowers to pick from depending on their need for flexibility.  They will consider all major property types nationwide. The program is geared towards repositions; lender will be sensitive to borrower’s acquisition timetable.  Stabilized properties will also be considered. Program Highlights:(1) Loan Size: $2,000,000-$30,000,000; (2) Terms: 1, 3, or 5 years; (3) Amortization: Interest only (amortized loans are also available); (3) Pricing/(Term Specific): (a) 1 Year: 30-day LIBOR + 1.75%-2.00%; (b) 3 Year: 30-day LIBOR + 2.50-2.75%; (c) 5 Year: 30-day LIBOR + 2.75-3.75%; (4) Min. DCR on Income in Place: 1.10 for multifamily, 1.15 for commercial; (5) Minimum DCR (proforma): 1.20 for multi, 1.25 for comm.; (6) Maximum LTV (stabilized): 80% for multi, 75% for comm.; (7) Loan-To-Cost: Up to 85% (up to 90% w/equity maintenance provisions); (8) Lender Fee: 1.0-1.5% origination + exit fee may apply if not refinanced with the same lender; (9) Prepayment (Term Specific): 1 Year: Prepayable at any time; 3 Year: 24 month lockout, 1% 19-24 months, 0.5% 25-30 months, open thereafter; 5 Year: 24 month lockout, 3% 25-36 months; 2% 37-48 months; 1% 49-54 months; open thereafter.

NOTE: Several of our luncheon attendees/FinFax readers have requested the full text of Ross C. DeVol’s remarks at the first luncheon in this year’s GSP/AT-MRF 2000 Executive Luncheon Series, which took place on March 21^st.  All e-mail recipients of FinFax will receive the text as a separate e-mail the week of April 10^th.  To request a copy, please send an e-mail to dpascale@gspartners.com