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| Volume IX, No. 6 |
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February 16, 2001 |
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| KEY RATE INDICES |
FANNIE MAE RATES * |
| Prime Rate |
8.50% |
| 11th District |
5.61% |
| 3 Mo. T’s (YTM) |
4.93%
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| 6 Mo. T’s (YTM) |
4.93% |
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| 5 Yr. U.S. T’s |
4.91% |
| 10 Yr. US T’s |
5.11% |
| 30 Yr. US T’s |
5.46% |
| 12-MAT |
6.108% |
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| LIBOR - 1 mo. |
5.58% |
| LIBOR - 3 mo. |
5.41% |
| LIBOR - 6 mo. |
5.297% |
| LIBOR - 1 yr. |
5.295% |
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| Tier 2+ (80% LTV) |
7.14% |
| Tier 3+ (65% LTV) |
6.96% |
| Tier 4+ (55% LTV) |
6.76% |
| 10 yr. term/30 yr. amort. |
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TRANSACTION OF THE WEEK!!!
$350,000,000 Development Venture Arranged for JARCO with J.H. Snyder to Develop a 23-Acre High Density Urban Mixed-Use Development Adjacent to the North Hollywood Subway Station and Bus Terminal: GSP has arranged the development venture between J.H. Snyder & Co. and JARCO to develop a planned $350,000,000 mixed-use development in North Hollywood. JARCO spent nearly 3 years processing entitlements and acquiring strategic parcels making up 6 acres of the 23-acre land assemblage. The Project: The assemblage is entitled for up to 2,000,000 s.f. of mixed-use development including more than 520 multi-family units, over 500,000 s.f. of office, a multi-phase multi-level urban retail center, and a hotel site. The assemblage is both unique and significant, fronting the east side of Lankershim Boulevard and wrapping around 2 sides of the last stop on the MTA Redline subway system and bus transit terminal. The property has been identified as a Genesis Project by the City of Los Angeles. Still to be negotiated are the needs of the LA Unified School District to locate a high school in the immediate area. Snyder has initiated discussions with the MTA, CalTrans, the CRA, and the LAUSD to integrate those requirements. This may involve Snyder becoming the master developer of the MTA parcels as well. GSP Scope of Responsibilities: GSP was retained as financial advisor to Allen Radford, JARCO's principal owner, after JARCO had been selected by the City of Los Angeles Community Redevelopment Agency to be the project developer. GSP's responsibilities included the selection of a venture partner providing both development and financial capacity to implement the proposed development. GSP worked with JARCO's consultants who did the preliminary design planning, project costing and economic projections and processed the EIR (completed, approved and certified. GSP provided input with respect to financial projections, development concepts and economic feasibility including participation in review meetings with the Redevelopment Agency. Selection of the J.H. Snyder as the Developer Partner: In selecting the developer partner, GSP evaluated a number of alternatives, financing structures and partners, some having specific experience in portions of the development, others being financial but not developer partners and some bringing the full range of capabilities. J.H. Snyder brought the entire range of capabilities to the project. J.H. Snyder now controls of one of the largest and most significant in-fill urban projects in Southern California, one in which there is enormous community support and where much of the pre-development "heavy lifting" has been completed, including land assemblage, public grants and loans and the completion of the EIR. Snyder believes he has saved as much as two years in the pre-development process and can be under construction with his first phase of development in the 1st quarter 2002. The J. H. Snyder Company: The J.H. Snyder Company, with a 51-year development history, shared Radford's vision and recognized the value of what Radford had accomplished. When Snyder was presented to the CRA Board, as the successor developer, the Board warmly received the transition. Snyder's reputation preceded him. "Jerry Snyder is a very reputable and successful developer who thinks outside the box," said Los Angeles County Supervisor Zev Yaroslavsky, who is among the many public officials closely watching the development. "He builds to meet the needs and constraints of the property." He and his three operating partners are well known because of their prior and current projects, which have added significantly to the fabric of Southern California urban redevelopment. J.H. Snyder Co. has built 41,000 homes, 4 million square feet of offices and 1.3 million square feet of retail development, most of it in California. They have nine other projects currently in development. (George Smith, David Buxton) |
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| UCLA Extension/Grubb and Ellis Real Estate Conference: GSP's David Rifkind reports from the conference held on Thursday, February 15th in Beverly Hills: (1) Electricity: Companies looking to locate in California will consider alternatives due to unreliability of energy (and pricing); (2) California is not alone: We are running at a 5% power reserve (very low), note that Florida=7.0%, Rhode Island=7.5%, other states are close to capacity. A national solution will become necessary; (3) Institutional Investors: So Cal buying opportunities are getting scarce as sellers have not yet priced in creeping market uncertainty. Also, lots of capital chasing less quality transactions. (4) REITS: Top tier REIT stock is trading at higher multipliers than their underlying portfolio assets. Many think that the shares are still underpriced, even after outperforming most other capital market investments in 2000; (5) What's Next? Opportunity fund reposition transactions done over the past few years are maturing into stabilized properties. Watch for these IRR driven deals to hit the market as most exit strategies envisioned the property being sold. (David Rifkind, David R. Pascale, Jr.) |
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SPEAKER'S CORNER
George Smith to Moderate Commercial Property World Financing Panel (New York City, March 19-21): The panel entitled "Debt Market Update: The Latest Sources of Debt Capital" will include the following speakers: (1) Steve Heller - ARCS Commercial Mortgage, (2) Mark Gibson - Holiday Fenoglio Fowler, (3) Neil Freeman - ARIES Capital, (4) Thomas Melody - L.J. Melody & Co., (5) Scott Suttle - Berkshire Mortgage Finance, (6) David Twardock - Prudential Mortgage Capital.
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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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