GSP RIFKIND CAPITAL ADVISORS GOES

TRANSACTION OF THE WEEK !

$9,262,500 Acquisition Financing (CMBS Transaction: 9 Business Days from Application to Funding) for Schnuck’s Anchored Shopping Center in Decatur, Illinois. GSP arranged highly expedited financing to meet the borrower’s acquisition timetable. (Seller had a drop-dead 1031 exchange deadline). How was this accomplished? (1) All third party vendors accelerated their processes; (2) GSP negotiated a provision whereby the lender accepted the estoppel/SNDA from the largest tenant post closing; (3) Lender was flexible during loan process as sales terms were being negotiated. Also: No escrows are required for TI’s or leasing commissions, a unique standard program feature offered by this CMBS lender. Unlike most originators, this lender retains the loan servicing, providing an additional comfort level to our borrower if issues arise during the loan term. The property: 205,000 s.f., 4 tenants, 96% occupied, completely rebuilt in 1998 except for 2 original walls. Located along the prime retail strip in Decatur. What’s a Schnuck’s? It is the premier privately held Midwestern grocery chain with over 90 locations throughout Illinois, Indiana & Missouri. Terms: (1) Rate: T + 2.00%; (2) Term/Amort: 10/30; (3) LTV: 75%; (4) DCR: 1.25; (5) Lender fee: par with no additional costs for the quick close; (6) Non-recourse (Michael Schwartz, George A. Smith).

HOT MONEY!!

Attention Apartment Owners

Fannie Mae has introduced a new ARM program with rates indexed to either 30-day or 90-day LIBOR (currently 5.89% and 6.09%); rates adjust every 30 or 90 days. Other Highlights: (1) Term/Amort: 10 years/30 years; (2) Tier-2 loans can range up to a 77.5% LTV at a breakeven DCR calculated at 3% above the initial rate. Today’s fully indexed initial rate is 1.72% over the selected LIBOR index, (today’s all in rates: 30 day-7.65% / 90 day-7.85%). Lower leveraged transactions (Tier 3 or 4) feature more attractive pricing. At the borrower’s option, the loan may be converted to either a 7 or 10 year fixed rate loan after the first year. The pricing will be based upon prevailing market rates at the time of conversion. Once converted to a fixed rate loan, the borrower has the option of increasing the loan up to 80% LTV by utilizing the Fannie Mae Second Program.*

HOT MONEY!!

GSP RIFKIND CAPITAL ADVISORS GOES NATIONWIDE WITH NEW CAPITAL ALLOCATIONS Coming off a record year of private placements totaling over $130,000,000 million, GSP/R has received allocations in excess of $175,000,000 for quick-close transactions. These funds are available immediately. Money available for: note purchases, debtor in possession & priming loans, fully entitled land, special purpose properties, etc. Loans to be secured by First Trust Deeds and feature flexible underwriting. Closings can happen within days. Note: GSP/R now accepts nationwide submissions including Alaska and Hawaii.

Interest Rate Update. Treasuries, Inverted yield curve: The inversion is holding over a several week period and is quickly becoming "status quo". The government is issuing 30 year bonds only once annually and will buy back $30 billion worth of the long bonds later this year. Supply/demand dynamics have driven the yields lower than the 10 year. Some pundits are opining that the 10 year is now the "benchmark" treasury. This week: The U.S. Government’s quarterly "refunding", the following new issue auctions: Tuesday: 5 year notes, Wednesday: 10 year notes, Thursday: 30 year bonds. All issuances were $10 billion each. Buyers were hesitant, leading to a "choppy" week of rising yields across the board. The "bid-to-cover" ratios (indicating the amount of bids divided by the amount of available issuance--higher is better) were the lowest since 1997. (recent issues have averaged 1.95 to 1, this week’s 1.50 to 1 for the 10 yr, 1.33 to 1 for the 30 yr.) Note: the "on the run" 10 year now matures on 2/15/2010. Today’s relatively soft retail sales report for January (+0.3% compared to +1.7% for Dec 1999), led to a rally and the 10 year closes at 6.60%. Next Week: Big week of reports, may be volatile. Wednesday: Building permits, export/import prices. Thursday: January PPI, Core PPI. Friday: CPI, Core CPI All will be closely watched by the Fed and Bond traders. Stay tuned…….

SPEAKER'S CORNER

George Smith will be a featured speaker at the RMA (Robert Morris Associates) Commercial Real Estate Lending Forum, March 2 and 3, at the Sheraton LAX. Subject: Permanent Financing - a Market Update, Trends and Outlook

For more information, call RMA at (215) 446-4000