Short Term (3-5 Year) Financing

TRANSACTION OF THE WEEK !

$11,000,000 (100% Cash-Out) Refinance of Virtually Empty "Shell" 90,000 Sq. Ft. Office Building in Glendale: The investment grade anchor tenant (85% of the net rentable space) has 7 years remaining on a 10 year lease and has never taken occupancy. The upper five floors of the 6-story building are in "shell" condition with no build out whatsoever. The sole occupant leases 11,000 s.f., of ground floor space, their lease rolls in 2004. GSP arranged financing with a life company who was able to structure re-tenanting reserves of only $10,000 per month. The lender became comfortable with the submarket (less than 5% vacancy for large blocks of space) and our borrower’s management expertise. Terms: (1) Rate: 10-year T + 2.25%; (2) Term/Amort: 10/25; (3) LTV: 75%; (4) DCR: 1.35; (5) Non-recourse; (6) Lender Fee: 1.0% (Gerald Price, Gary E. Mozer)

$6,900,000 Leasehold Loan for 90,000 Sq. Ft. 2-Story Retail Center in Orange County: This Marshall’s anchored center was built in the early 1970’s and is presently 90% leased. The other tenants include local and regional businesses, including 3 restaurants. The well maintained center features distinctive faux European design and is adjacent to a major freeway with on and off ramp access to the site and 34,700/day traffic count. The property is on an unsubordinated ground lease expiring in 2060. The property had been 50% leased for 3 years prior to funding. Loan allowed borrower to be reimbursed for loans made to the partnership over the last 3 years (cash out) and paid off an existing 1^st mortgage at a discount. Terms: (1) Rate: 10-year T + 2.10%; (2) Term/Amort: 10/30; (3) LTV: 75%; (4) DCR: 1.30; (5) Non-recourse; (6) Lender Fee: Par. (Steve Bram, Brad Black)

$3,700,000 (80% LTV) for 60 Acre R.V. and Tent Resort in North L.A. County: This is a "mixed-use" resort: RV’s and tents! The property operates year-round and features: (1) 231 full hook-up RV sites; (2) 38 partial hook-up sites, (3) 200 tent sites, (4) handicap facilities; (5) general store; (6) two large swimming pools; (7) laundry area; (8) dance hall/video arcade, (9) group meeting room. Our client has owned the property since 1994 and has significantly upgraded the facilities. GSP arranged financing with which allows the borrower to retire higher rate debt and recapture some equity after the rehab. Terms: (1) Rate: 6-month LIBOR + 2.60%; (2) Term/Amort: 5/30; (3) LTV: 80%; (4) DCR: 1.30; (5) Non-recourse; (6) Lender Fee: 1.0% (Henry Bryan, George Smith)

HOT MONEY!

Short Term (3-5 Year) Financing With No Rate Risk? Yes! This nationwide lender has rolled out an innovative short-term program which locks in rate and provides flexibility (see prepayment provision below). The non-recourse financing is Treasury based. Program Highlights: (1) Loan Amounts: $2,000,000-$25,000,000 (larger loans are available on a case by case basis); (2) Terms: 3-5 year; (3) Amort: 25-30 years, (3)Pricing: Typical CMBS spreads (150-240 bps depending on leverage, property type, etc.) over the corresponding interpolated Treasury; (4) Property Types: Multi-family, retail, industrial, office, hotel; (5) Prepayment: 3 Yr. Term – 18 month lockout, 15 month yield maintenance (typically 2.0% of remaining loan balance), 3 month open to prepay at par; 4 Yr. Term -- 24 month lockout, 21 month YM (typically 2.0%), 3 months open; 5 Yr. Term -- 30 month lockout, 27 month defeasance, 3 months open; (6) Non-recourse.

Interest Rate Trends: William Dudley, Chief Economist for Goldman Sachs, and a featured speaker at last year’s GSP/ATMRF Executive Luncheon Series has just issued his latest US Economic outlook. Highlights: (1) Greenspan has signaled the Fed is poised to tighten monetary policy further in an effort to bring demand growth into better alignment with supply expansion; (2) A further quarter point hike in the Fed Funds rate is likely on 3/21/2000; (3)"We continue to look for a total of 100 basis points tightening this year and next, but the risks are growing that it could arrive on a somewhat faster timetable" ; (4) Wealth Effect Inequality: Stock ownership has increased rapidly among high income families who are disproportionately driving consumption, while lower income families’ debt burden is going up; (5) If the market falters, consumption will also falter, increasing recession risk.; (6) Economic dynamics remain very strong with expansion continuing, however, there are signs that inflation may tick up.

SPEAKER'S CORNER

Gary M. Tenzer will be speaking at "Buying and Selling Environmentally Challenged Property" sponsored by Arter & Hadden LLP. Date: Thurs., March 9, 2000; Time: 3:30 p.m. Location: Warner Center Marriott, Woodland Hills, CA. For more info., contact (818) 596-2284.