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| KEY RATE INDICES |
FANNIE MAE RATES * |
| Prime Rate |
6.5% |
| 11th District |
4.274% |
| 3 Mo. T’s (YTM) |
3.26%
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| 6 Mo. T’s (YTM) |
3.21% |
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| 5 Yr. U.S. T’s |
4.31% |
| 10 Yr. US T’s |
4.79% |
| 30 Yr. US T’s |
5.38% |
| 12-MAT |
4.671% |
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| LIBOR - 1 mo. |
3.57% |
| LIBOR - 3 mo. |
3.49% |
| LIBOR - 6 mo. |
3.49% |
| LIBOR - 1 yr. |
3.61% |
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| Tier 2+ (80% LTV) |
6.63% |
| Tier 3+ (65% LTV) |
6.45% |
| Tier 4+ (55% LTV) |
6.25% |
| 10 yr. term/30 yr. amort. |
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| TRANSACTION OF THE WEEK! |
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$14,500,000 Bridge Refinance (100% of All-in Cost) for 68-Unit Ultra Luxury Apartment Complex in Malibu: GSP has arranged "float to fixed" financing which retires an existing acquisition/rehab loan and recoups the borrower's equity. Property was one of the last major residential REO's from the early 1990's in Los Angeles. Our client purchased this former condominium development from the original construction lender in April 2000. The property was delivered 100% vacant and required approximately $3,000,000 in construction and rehab. Funding of the new loan occurred at the tail end of construction and commencement of lease-up. Closing conditions included: (1) Certificate of Occupancy from City of Malibu; (2) 20% Signed leases; (3) 10% Physical Occupancy; (4) Signed leases had to be at least 90% of pro-forma rents (approximately $2.00 psf). Property Specs: 4 identical 17-unit buildings, each containing a variety of 2 & 3 bedroom/2.5 - 3.5 baths, single and multi-story floor plans averaging 2,000 sq. ft. Many of the units have direct ocean views, lofts, and all feature spacious private outdoor living areas. Common Area amenities include tennis courts, swimming pool, spa, putting green, outdoor fitness course including jogging trail, and walking distance to a popular public beach. A major life company provided highly structured financing tailored to borrower's needs at the following terms: (1) Rate: 3 month LIBOR + 3.25%; (2) Term: 3 years (option to convert to fixed rate perm after 1 year lockout); (3) Amort: Interest only year 1, 30 year thereafter; (4) LTV: 60%; (5) Holdbacks: 8-month interest reserve, 150% of remaining construction costs; (6) Lender Fee: Par; (7) Recourse until 90% occupancy is reached, non-recourse thereafter; (8) Permanent loan option: Subject to 90% occupancy, 1.6 DCR, terms to be determined, 0.25% exit fee if borrower does not opt for lender's perm. (Andrew Levant, Steven Hamermesh)
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$5,800,000 Uncovered Construction Loan (100% Spec) for 116,000 s.f. Multi-Tenant Industrial Complex in Northern Los Angeles County: GSP has arranged 80% of cost financing for the first phase of a planned 240 acre industrial business park. This is our client's first commercial development. Property Specs: 3 buildings, concrete tilt up, warehouse with less than 5% mezz office build out, 24 ft. clear heights, dock height doors (bldg 1: 10, others 3 apiece) 190 parking spaces, 47% coverage of total land area. Submarket: Barriers to entry as this is one of the last undeveloped sites in the North County Area, historic low vacancy, and excellent freeway access. A regional bank provided financing at the following terms: (1) Rate: 30 day LIBOR + 2.50%; (2) Term/Amort: 18 months/interest only; (3) 80% of cost, not to exceed 75% of appraised value; (4) Recourse; (5) Lender Fee: 1.0%; (6) Extension option: 6 months for 0.25% fee. (Michael Gottlieb, Henry Bryan)
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| HOT MONEY ! |
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Small Apartment Loans (up to $2,000,000) as Low as 6.375% Fixed: This nationwide program is targeted to the multifamily investor seeking maximum proceeds, fixed rate and flexibility. Program Highlights: (1) 30 year loan term: Fixed rate for 3, 5, 7, or 10 years. After the initial fixed rate period, borrower has the option of (a) Paying off the balance with no penalty, (b) Reset at then current rates for 3, 5, 7, or 10 more years, (c) Floating rate at 1 year T + 3.00% resetting annually; (2) Fixed Rates: 3 years--6.38%, 5 years--6.75%, 7 years--7.00%, 10 years--7.50%; (3) Max LTV: 80%; (4) Min DCR: 1.25; (5) Underwriting: Today's rents going forward; (6) Amortization: 30 years; (7) Lender Fee: 0.25%; (8) Flexibility: No prepayment penalty if property is sold, even during fixed rate period. No prepayment penalty if property is refinanced with same lender for cash out purposes; (6) Free 60 day rate lock at any time after application; (7) Recourse
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| INTEREST RATE/CMBS UPDATE |
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The 10 year Treasury yield dropped to 4.79% as dismal economic reports indicate that the Fed will continue rate cutting (next meeting: October 2). Most distressing was today's 4.9% unemployment rate. Swaps also tightened slightly, dropping below the +80 "equilibrium mark" to +79.25. CMBS: A $1.17 Billion regular fixed rate conduit pool went to market this week. The 10 year AAA's priced at Swap +45, demonstrating no shortage of liquidity in the CMBS market. A recent Lend Lease report on CMBS dynamics indicates that AAA bonds are just as liquid as corporate bonds. Example: AAA rated CMBS trade within a 5 basis point bid/ask spread on most Wall Street trading desks. Volume remains high with $47 billion securitized so far in 2001 with plenty in the pipeline...Stay tuned…(David R. Pascale, Jr.)
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| * GSP is an L.A. correspondent for ARCS Commercial Mortgage, the nation's largest FNMA/DUS originator. |
| Note: Lender pricing and loan points are subject to change and exclude GSP loan placement fees. |
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