Fixed/Floating Rate Lender Funding

TRANSACTION OF THE WEEK !

$16,930,000 Acquisition/Conversion of 53 Condo Units: GSP arranged non-recourse, interest only financing for the acquisition of these existing condominium units located within a 1980’s West LA high rise. The 2 & 3 bedroom units are currently leased as apartments. The lender provided 75% of total project cost financing including a $2,750,000 renovation budget and interest reserve. GSP negotiated loan terms that include partial release provisions and no "warm body" signature required for the standard carve-outs. (Carve-outs are limited to the ownership entity). Terms: (1) Rate: Prime + 1.5%; (2) Term/Amort: 24 months/interest only plus two 6-month extension options; (3) Lender Fee: 1.5%; (4) Non-recourse; (5) Partial Release Provisions: The greater of 90% of sale proceeds, or 140% of pro-rated financed amount. (Andrew Levant).

$5,250,000 for 2 Industrial Buildings in Mid-City Los Angeles—"This may be the last 11^th District Based Commercial Real Estate Loan Ever!" – George Smith: This transaction closed at the end of 1999, just as the lender converted their loan pricing matrix to 12-MAT. The two tenant, 100% occupied subject totals 106,000 s.f. with 100% roll during the term of the loan. The larger building is leased to a "Dot Com" start-up with no significant operating history. The 10-year floating rate loan provides maximum flexibility for the borrower with the following prepayment schedule: Yrs. 1-4: 1.0%, Yrs. 5-10: Par. Terms: (1) Rate: 11^th District + 3.25% (Floor: 7.75%, Ceiling: 12.95%); (2) Term/Amort: 10/25; (3) DCR: 1.60; (4) LTV: 60%; (5) Partial recourse; (6) Lender Fee: 1 pt. (George Smith, David Stepanchak)

$3,625,000 (7.85% Fixed Rate) for Orange County 6 Building, 97,000 s.f. Industrial Portfolio: These 6 buildings are located in an industrial park in northern Orange County. The well-maintained buildings range from 11,000 to 24,000 s.f., 100% occupied by separate single tenants. Tenant mix ranges from local businesses to national publicly traded investment grade companies. Several leases roll within the next 3 years in this 100% occupied submarket. GSP arranged financing with a life company who was able to lock rate early in the process prior to the run-up in Treasuries. Terms: (1) Rate: T + 1.95% (7.85% coupon); (2) Term/Amort: 10/25; (3) Cross-collateralized; (4) DCR: 1.30; (5) LTV: 70%; (6) Lender Fee: 0.75%; (7) Non-recourse. (Allan Tanner)

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THE 2000 EXECUTIVE LUNCHEON SERIES…

For information, contact Steven Hamermesh (ext. 123)

HOT MONEY!!

Fixed/Floating Rate Lender Funding Mezz Debt to 90% of Cost: GSP closed several floating rate transactions with this nationwide lender. Bridge/Variable Program Highlights: (1) $3,000,000 and up; (2) 30-day LIBOR + 2.00-3.00%; (3) LTV: Up to 80% of present value/ 90% of total project cost; (4) Terms: 2-3 years with extension options. Note: No "fee" for extension options, rather a slight increase in spread; (5) Lender Fee: 1.5%, no exit fee if lender finances the perm; (6) Lockout: 12-24 months, prepayable thereafter. Mezzanine Program Highlights: (1) $500,000 and up; (2) Only available with this lenders’ 1^st T.D. (usually fixed rate); (3) Rate: 12-16% fixed, no IRR requirements regardless of property performance; (4) Up to 90% combined with the senior LTV depending on property specs; (5) Terms: 7 or 10-year fully amortizing; (6) Lockout: 3 years; (7) Lender Fees: Typically 2.0% with no exit fee (deal specific)