Floating Rate LIBOR Based C&I Debt

$43,500,000 5.31% FNMA/DUSARM to Refinance Country Village (an 1194 Unit Active Adult Community in Mira Loma, Riverside County, California): (Note: GSP has a correspondency agreement with ARCS Commercial Mortgage and there is no incremental cost to originate FNMA loans through GSP) Another indication of the availability of the remarkably low interest rates available currently is this refinance of a project built in 1968 (well ahead of its time) and now a unique senior's community that enjoys 98.4% collections and annual turnover of less than 27%, i.e. average tenant occupancy approximately 4 years. Project Description: A unique self contained community that could not be replicated today because of high land costs, located on 115 acres with Freeway frontage (the 60 Fwy) and direct Fwy access: (1) approximately 10 units per acre (2) All of the apartment buildings are single story (3) 99 individual buildings including commercial, office, clubhouse, and recreation areas (4) 126 - studios, 356 - 1BR/1BA and 712 - 2BR/1BA (5) unit sizes range from 344 sf to 766 sf. (6) Each unit has it's own hot water heater, central heating and air conditioning, range and refrigerator (7) entry drive with community buildings including a country store (8) a loop street with a nine hole golf course, driving range and putting green with most units enjoying golf course frontage (9) two heated swimming pools of which one is Olympic size (10) saunas and hobby shops, which are complete with fully equipped art lab, wood-working shop, sewing room, and a ceramic lab with kilns (11) The recreation area offers; pool hall with billiard and ping-pong tables.; two lounges, which are equipped with television sets; Grand Ballroom that seats 500 people 1.84% and a 3.19% Incremental Rate and Loan Constant on the Incremental Loan Proceeds: "According to George Smith, this loan was the equivalent of borrowing an additional $13,960,000 at a rate of 1.84% with a 3.19% constant for 10 years at current Libor Rates, a remarkably low incremental rate on the equivalent of a 2nd mortgage." The loan paid off a HUD loan of $26,840,000, 7.65% rate plus ½%/year for HUD insurance and a loan constant of 9.15%. Tier 2 Plus Plus Pricing: Because of the remarkable stability of the cash flow, low turnover, community facilities and market rents nearly $1,000,000 above the project rents, Country Village qualified for Tier 2 Plus Plus pricing, FNMA's lowest rate for 80% loan to value pricing. Loan Terms: (1) Type: Floating Rate with flexible prepay because owner's are evaluating construction alternatives to add additional units and did not want a loan that was locked out to prepayment and a yield maintenance pre-payment provison (2) Rate and Spread: start rate of 5.31%, 216 bps over the 3 month LIBOR (3) Life Time Cap: 8.31% (4) Loan to Value: 75.1% (5) DCR: 1.488 and 1.095 at the lifetime cap of 8.31% (6) Term: 10 yr term with 30 yr amortization (7) Conversion to Fixed Rate Option: option to convert to a fixed rate loan after 1 year and no prepayment penalty at time of conversion (8) Multiple Financing Option: Upon conversion to a fixed rate, borrower can request 2nd mortgage based upon reunderwriting loan at then prevailing rates and request secondary financing. Funding Occurred Right After Sept. 11th Tragedy: With the capital markets in disarray, Fannie Mae was back in the market on Sept.12th and loan was rate locked on September 14th. (George Smith; Joel Simaie)

Low Leveraged Single Tenant 24,596 SF Office - $1,000,000 Cash Out Fixed Rate Perm: Our borrower was seeking a long term refinance of this "back office" two-story bank building in Northern California. There is no retail branch at this location. Challenges - Solutions: (1) Single tenant, non-credit short term lease - Current rents are below market, making lender comfortable that the tenant will exercise their option to extend when their lease expires in 5 years; (2) Size of loan request - Lender worked a portion of the processing fees into the spread and did not charge legal fees if documents executed "As Is". No ALTA survey was required keeping costs low making the refinance affordable for the client; (3) Tenant would not execute lender SNDA - Lender understood that foreclosure was unlikely given the low LTV and below market rents. Terms: (1) Rate/Spread: 7.20% floor/2.25%; (2) Term/Amort: 10/25; (3) LTV: 50%; (4) DCR: 2.0; (5) TI, LC, Cap Ex Reserves: None; (6) Non-recourse; (7) Lender Fee: Par. (David Stepanchak)