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| KEY RATE INDICES |
FANNIE MAE RATES * |
| Prime Rate |
8.00% |
| 11th District |
5.426% |
| 3 Mo. T’s (YTM) |
3.99%
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| 6 Mo. T’s (YTM) |
4.10% |
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| 5 Yr. U.S. T’s |
4.76% |
| 10 Yr. US T’s |
5.16% |
| 30 Yr. US T’s |
5.60% |
| 12-MAT |
5.711% |
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| LIBOR - 1 mo. |
5.03% |
| LIBOR - 3 mo. |
4.77% |
| LIBOR - 6 mo. |
4.64% |
| LIBOR - 1 yr. |
4.64% |
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| Tier 2+ (80% LTV) |
7.03% |
| Tier 3+ (65% LTV) |
6.85% |
| Tier 4+ (55% LTV) |
6.65% |
| 10 yr. term/30 yr. amort. |
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| TRANSACTION OF THE WEEK |
| $23,700,000 (7.25% Fixed, Interest Only in Year 1, 80% of Purchase Price Including Transaction Costs) Acquisition Financing for 180,000 s.f. Grocery-Anchored Promotional Center in Southern California: This "in-fill", 1980's built, 16-tenant center is anchored by a 52,000 s.f. grocery store. Additionally, it is shadow anchored by 3 investment grade big box retailers (not part of the collateral). Other tenants include a sporting goods, discount clothing, and office supplies stores all in excess of 15,000 s.f. Occupancy: 100%. Excellent Parking Ratio: 5/1,000 s.f. Most of the anchors, including the grocer, have sales that place them amongst the highest performing locations within the respective chains. The CMBS transaction features no leasing or TI reserves. Borrower is posting a letter of credit, which will be released upon renewal of the major tenants. This is the borrower's 16th transaction with GSP. Borrower took advantage of early rate lock (30 days/no cost) to secure a 7.25% rate on a max-leverage retail transaction. The transaction was closed in 45 days to fit the acquisition timetable. Terms: (1) Pricing: T + 2.20; (2) Term: 10 years; (3) Amort: Interest only year 1 then 30 years; (3) DCR: 1.30; (4) LTV: 80%; (5) Non-recourse; (6) Lender Fee: Par. (Gary E. Mozer, Peter Smyslowski, Gerald Price) |
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| $10,700,000 (7.50% Fixed) Acquisition Financing for 90,000 s.f. Single-Tenant Big Box Hardware in North L.A. County: GSP has arranged 75% of purchase price financing for this 1988 built full service (including nursery) hardware store about to undergo an expansion. In order to get to the loan proceeds, the lender underwrote based upon 2004 income. The borrower is posting a letter of credit until the rent bump. The tenant has 16 years remaining on the present lease and is expanding to 114,000 s.f. Terms: (1) Pricing: 7.50%; (2) Term/Amort: 10/30; (3) DCR: 1.20; (4) LTV: 75%; (5) Non-recourse; (6) Lender Fee: Par. (Henry Bryan) |
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| HOT MONEY! |
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Fixed Rate Mezzanine Debt From Pension Fund Advisor: Pension Fund Advisor investing on behalf of three large state employee pension fund is providing mezzanine debt at rates generally below those offered by typical Opportunity Funds. (1) Sweet Spot: $15MM to $35MM (as low as $10MM). Higher may be amounts available. (2) Property Risk Profile: Advisor is experienced developer, property manager and value added repositioner. Accordingly, they will consider properties with a spectrum of risk profiles. (3) Property Types: Hotel, selective health care, office, apartments, selective retail and industrial. (4) Pricing: "Price to risk", i.e. function of property stability, loan-to-value, property category, etc. Fixed rate yield expectations as low as 13%-15% for stabilized with LTV in the 65%-75% range; 18%-19% for 80%-85% LTV; will go into the mid-20s for "opportunity risk" investments; will also price on a floating rate basis. (5) Term: 5 years (7 years by exception). (6) Lock Out: Typically 3 years with prepay negotiable.
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| Fin-Fax Readers Take on Wall Street Economists….Who Will Beat the Experts? Thanks to those who participated in our survey. Our readers were asked the same questions as the Wall Street Journal's survey of economists. Your Predictions: (1) 3-Month Treasury on 6/30/2001: Range 3.75%-5.32%; Average: 4.46%; (2) 30-Year Treasury on 6/30/2001: Range: 4.50%-5.95%; Average: 5.14%; (3) May 2001 CPI: Range: 1.25%-3.80%; Average: 2.65%; (4) May 2001 Unemployment: Range: 4.10%-5.80%, Average: 4.69%. Good luck to all! (David R. Pascale, Jr.) |
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SPEAKER'S CORNER
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| George Smith will address The Belden Club on April 19th; 7:30AM at the Beverly Hilton Hotel. The Belden Club, founded in 1991, has more than 180 members and chapters in Los Angeles and Orange County. Its membership is a cross section of professionals from all sectors of the real estate industry sharing opportunities and discussing emerging trends in Southern California and other regional real estate markets. |
| * 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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