| |
|
| Volume VIII, No. 13 |
|
March 31, 2000 |
|
|
| KEY RATE INDICES |
FANNIE MAE RATES * |
| Prime Rate |
9.00% |
| 11th District |
4.967% |
| 3 Mo. T’s (YTM) |
6.29%
|
| 6 Mo. T’s (YTM) |
6.53% |
|
| 5 Yr. U.S. T’s |
6.32% |
| 7 Yr. US T’s |
? |
| 10 Yr. US T’s |
6.01% |
| 30 Yr. US T’s |
5.84% |
|
| LIBOR - 1 mo. |
6.13% |
| LIBOR - 3 mo. |
6.29% |
| LIBOR - 6 mo. |
6.53% |
| LIBOR - 1 yr. |
6.94% |
|
|
| Tier 2+ (80% LTV) |
8.18% |
| Tier 3+ (65% LTV) |
9.03% |
| Tier 4+ (55% LTV) |
7.83% |
| 10 yr. term/30 yr. amort. |
|
|
|
|
|
TRANSACTION OF THE WEEK!!!
$2,625,000 for 70-Unit Apartment Building in San Fernando Valley: Located in the heart of the valley, this single building, multifamily property is presently 96% occupied. The 70 units are split evenly between 1 and 2 BR. Our borrower purchased the property in mid-1998 with a 12% vacancy. During the past two years, he implemented a minor cosmetic rehab and slowly raised occupancy and rents. GSP arranged financing with a CMBS lender and closed during the present market uncertainty. The lender was able to hold spread at T + 215. The financing allowed the borrower to pay off existing higher rate financing and pull some “cash out”. Terms: (1) Rate: T + 2.15%; (2) Term/Amort: 10/30; (3) LTV: 80%; (4) DCR: 1.20; (5) Non-recourse; (6) Lender Fee: Par. (Gene Brunkhardt)
|
|
| California’s Economy to Roar Through 2000 According to Anderson School Quarterly Report: The outlook for California’s economy continues to be exceptionally rosy, according to the closely watched UCLA Anderson Forecast, released on Wednesday of this week. Highlights: (1) Average personal income to rise 7.6% during 2000, which is astounding; (2) California will produce nearly 500,000 jobs, more than any year since 1978; (3) Cal is powered by “wealth effect” (stocks), home building and rising exports; (4) According to Tom Lieser, executive director of the Anderson Forecast: “it's going to be a very good year,” He also said the economic gains predicted by UCLA, "as good as they are, could be a little conservative."; (5) Cal’s expansion began six years ago, is the 2nd longest in state history, and predicted to outpace US growth; (6) Sometime in 2001, state and national unemployment rates will even up, ending over a decade in which the state has lagged behind, in the last 3 months California has generated 18% of new jobs nationwide; (7) Potential Speed Bumps: Stock market volatility (especially tech); labor shortages, Fed rate increases, high home prices; Japan’s economy hurting trade; (8) LA’s employment picture lags behind Orange and San Diego; (9) Bay Area remains the hottest economic growth area; (10) Infrastructure: Tax windfalls and budget surpluses have employer groups calling for more government spending (very unusual) for roads and schools. Why? Workers aren’t productive when they are stuck in traffic; (11) Homebuilding has lagged partially due to early 1990’s residential market meltdown…. (David R. Pascale, Jr.) |
|
|
HOT MONEY!!
Single-Tenant/Owner Occupied Lender Gets Aggressive, Specializing in Non-Investment Grade Tenants: This nationwide lender features an innovative fixed rate single tenant program which funded over $150,000,000 of non-investment grade transactions in 1999. Typical pricing is 10 yr. T + 250. Interestingly, there is no rate premium for longer term transactions, i.e. 15 or 20 year terms will be priced at 10 yr. T + 250. Program Highlights: (1) Loan Amounts: $2,500,000 and up; (2) Max. Term: Usually equal to lease term; (3) Max. Amort.: Lease term + 10 years (Note: If leverage is under 70%, a 25 year amort. may be considered depending on credit quality – also, if area population is under 250,000, the max. amort. is 20 years); (4) DCR/Underwriting: Min. DCR is 1.15 with only 3% management taken out of the NOI, no vacancy, no other reserves; (5) Single-Tenant Criteria: Revenues at least $50MM, net worth at least $25MM, 5 years of positive cash flow; (6) Owner/Occupied Criteria: Revenues at least $10MM, net worth at least the loan amount, 5 years positive cash flow.
|
|
|
SPEAKER’S CORNER
George Smith will serve as emcee and will also be a judge at the NAIOP - UCLA vs. USC M.B.A. Competition. Date: Tues., April 11th; Time: 6:00 p.m. (Cocktail Reception); 7:00 p.m. (Dinner & Presentation); Location: Museum of Flying, DC3 Restaurant (Santa Monica). For more information, call NAIOP @ (714) 979-9131.
REMINDER: George Smith will be moderating the Finance Panel at Real Estate Conference Group’s “Technology + Real Estate” Conference, which will focus on the Internet’s impact on commercial real estate. Date: Mon., April 17th; Location: Century Plaza Hotel (Los Angeles). For more information, call (310) 285-5327 or go to www.realestateoutlook.com.
|
|
| * GSP is the exclusive L.A. correspondent for ARCS Commercial Mortgage, the nation's largest FNMA/DUS originator. |
|
|
|
|
|
|
