5.02% (as of 5/11/2001) Adjustable Rate - FINfacts

KEY RATE INDICES

FANNIE MAE RATES *

Prime Rate	7.50%
11th District	5.198%
3 Mo. T’s (YTM)	3.75%
6 Mo. T’s (YTM)	3.79%

5 Yr. U.S. T’s	4.97%
10 Yr. US T’s	5.49%
30 Yr. US T’s	5.89%
12-MAT	5.530%

LIBOR - 1 mo.	4.12%
LIBOR - 3 mo.	4.06%
LIBOR - 6 mo.	4.03%
LIBOR - 1 yr.	4.16%

Tier 2+ (80% LTV)	7.32%
Tier 3+ (65% LTV)	7.14%
Tier 4+ (55% LTV)	6.94%
10 yr. term/30 yr. amort.

TRANSACTION OF THE WEEK

$9,450,000 Refinance for 80% Occupied Retail/Office Property on Bifurcated Leasehold in South Central LA: GSP has arranged "cash-out", non-recourse, financing on this mixed use property: (1) Retail: 220,000 s.f. grocery/drug anchored, built in 1960, rehabbed in 1988, 32 tenants, 81% occupied.; (2) Office: 6-story, 84,500 s.f., built in 1961, 80% occupied (approx. ¾ of them on month-to-month). The properties are on two contiguous legal lots with separate unsubordinated ground leases (47 years remaining). Challenge to Financing: The vacancy (for both parts) combined with heavy lease rollover in the next few years. Lender became comfortable with: (1) Experienced borrower; (2) Low loan per foot for both office and retail; (3) Lender required a cash flow sweep until property is 90% occupied, swept funds to be held in escrow until threshold is reached. Terms: (1) Rate: 6-month LIBOR + 3.50%; (2) Term/Amort: 5/25; (3) LTV: 75%; (4) DCR: 1.25; (5) Non-recourse; (6) Lender Fee: 1.0%. (David Stepanchak, George A. Smith)

$2,650,000 (80% LTV) Permanent Financing of 172-Unit Garden Apartment Complex in Houston, TX: GSP's Orange County office has arranged permanent financing on this 1980's vintage, garden style apartment complex located in Houston, TX. One of the challenges to the CMBS refinance was a 15% vacancy rate, but this was mitigated by 5 years of historical collections at this same occupancy level. The refinance allowed "cash-out" to our borrower. Terms: (1) Rate: 7.38%, T + 2.15%; (2) Term/Amort: 10/30; (3) LTV: 80%; (4) DCR: 1.20; (5) Non-recourse; (6) Lender Fee: Par. (Mike Gottlieb)

HOT MONEY!

5.02% (as of 5/11/2001) Adjustable Rate Jumbo Home Loans: Why So Low? (1) Lender is seeking new banking clients. (2) Loan requires setting up a bank account to make monthly mortgage debit payments. (3) Lender knows it has to win your other business, i.e. the range of private banking services they provide. (4) There are no other strings. Terms: Rate: "30 Day LIBOR + 90"; Amount: to $2,500,000; Term: 30 years; Payment Schedule: Interest only yrs 0-10; Lender Fee: 1%; Prepayment: 1% for years 0-4, no prepay thereafter; Geography: National; Borrower Credit: 700 FICO score; LIBOR History: 30-day LIBOR has averaged 5.64% since January 1996 (64 months). This loan would have averaged 6.54%. For this loan to go to 7%, 30-day LIBOR would have to increase by 2% to 6.1%.

	Purchase	Refinance	Cash Out
Amount	LTV	LTV	LTV	Liquidity
To $1,100,000	80%	75%	70%	12 months
$1,500,000	75%	70%	70%	18 months
$2,000,000	70%	65%	65%	24 months
$2,500,000	60%	60%	60%	30 months

INTEREST RATE UPDATE

Treasury yields spiked this week (especially Thursday-Friday), 10 year is now at 5.49%. Why? (1) The "R" word, yes or no?: This week's economic reports indicate the US may be skirting a recession; Initial jobless claims (lower than expected), retail sales (higher) and consumer confidence (higher). Bottom Line: The market is unsure about next week's Fed meeting; a ½ point cut was a "sure thing" last week, now a ¼ point cut is in doubt. (2) Competition from Corporates: WorldCom announced the largest US corp. bond issuance in history this week: $12 billion. The offering is extremely oversubscribed with buyers attracted by juicy yields topping out above 8.4%. Market confidence in corporates is rising as recession fears ease. (David R. Pascale, Jr.)

* 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.