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| Volume IX, No. 3 |
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January 26, 2001 |
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| KEY RATE INDICES |
FANNIE MAE RATES * |
| Prime Rate |
7.75% |
| 11th District |
5.607% |
| 3 Mo. T’s (YTM) |
5.16%
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| 6 Mo. T’s (YTM) |
5.04% |
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| 5 Yr. U.S. T’s |
4.91% |
| 10 Yr. US T’s |
5.27% |
| 30 Yr. US T’s |
5.64% |
| 12-MAT |
6.108% |
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| LIBOR - 1 mo. |
5.69% |
| LIBOR - 3 mo. |
5.56% |
| LIBOR - 6 mo. |
5.41% |
| LIBOR - 1 yr. |
5.33% |
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| Tier 2+ (80% LTV) |
7.15% |
| Tier 3+ (65% LTV) |
7.00% |
| Tier 4+ (55% LTV) |
8.80% |
| 10 yr. term/30 yr. amort. |
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TRANSACTION OF THE WEEK!!!
$61,292,060 (97%+ of Total Project Cost) Acquisition/Reposition Senior Bridge ($48,715,000) and Equity Financing ($12,577,060) for Southern California 600-Unit Apartment Portfolio: GSP arranged two tiered, non-recourse financing for these three non-contiguous properties located in the same Southern California sub-market. The Portfolio: Property #1: Built in 1964, 65 two-story buildings, 258 units (1-3 BR), amenities include: 7 swimming pools, tennis courts, basketball court. Property #2: Built in 1981, 22 two-story buildings, 250 units (1-4 BR), amenities include: 5 swimming pools, 2 spas, playgrounds, basketball courts, covered carports. Property #3: Built in 1976, 10 two-story buildings, 100 units (2-3 BR), amenities include: swimming pool, spa, fitness facility, playground, etc. This portfolio represents approximately 20% of this type of apartment product in the submarket. The Market/Location: Excellent commuter location in Southern California (Los Angeles MSA) with zero land available for further development. Submarket Occupancy: 97.6%+. Reposition: Borrower will renovate and modernize the project and raise rents to market. Unit rents are $150.00-$200.00 below market on average. Capital Structure: (1) Purchase Price: $51,600,000; (2) Renovation, Working Capital Reserve, Interest Reserve, Contingency, Closing Costs, etc.: $11,172,856; Total Capitalization: $62,772,856. The Financing - Senior Debt: (1) Loan Amount: $48,715,000; (2) Rate: LIBOR + 2.75%; (3) Term: 3 years plus 2-1 year extensions option for 0.25% fee each; (4) Interest only first 2 years, then 30 year amortization; (5) Non-recourse; (6) Lender Fee: 1.0%; (7) Prepayment: 18 month lockout, then prepayable for 1.0% fee (last 6 months prepayable at par); (8) Release Clauses: Partial releases available for individual properties at 115% of outstanding balance (excess payment used to pay down other loans). Equity: (1) Amount: $12,577,060; (2) Terms: Confidential. (Gary E. Mozer, Lee T. Norman) |
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| $12,633,000 (81% of Purchase Price) Bridge/Reposition Financing for High Rise Office (500,000 s.f.) Located in Major Midwestern City: This early 70's vintage office building is extremely well located in the central business district. The city has been growing at rates exceeding the national average for 3 decades. The property is 82% occupied by over 50 tenants. The borrower plans building improvements followed by an aggressive lease-up to stabilization. GSP arranged non-recourse, non-participating, bridge financing with a national bank with prepayment flexibility after the first year. Capital Structure: $11,500,000 floor funding--$1,130,000 hold back for leasing commissions, tenant improvements, and capital improvements. Financing Terms: (1) Rate: LIBOR + 3.00%; (2) Term/Amort: 3 years/interest only; (3) DCR: 1.10; (4) Non-recourse; (5) Extension: 1 year for 0.33% fee (must be at 65% LTV and 1.6 DCR); (6) Lender Fee: 1.0%; (6) Exit Fee: 1.0%. (Gary E. Mozer, Peter Smyslowski) |
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| Life Company Retail Financing Update: GSP's Michael Schwartz recently completed an extensive survey of life insurance companies while marketing a retail property. Life companies are becoming even more conservative when it comes to this product type. Several recent multiple store closings by major chains (including Office Depot, JC Penney, Eckerds and others) along with a cooling economy have caused lenders to closely watch this product type in 2001. Life Company Parameters: (1) Grocery and Drug anchored; (2) Institutional quality (large grocery store, recent construction or rehab); (3) Major MSA in-fill locations; (4) Credit tenants on long term leases should account for a 1.0 DCR on the desired loan amount. Exceptions to these rules are considered on a case-by-case basis depending on property specs, leverage, sponsorship, etc. |
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Congratulations to GSP/Rifkind's David Ellis and his wife Susan on the birth of their new Baby Boy!
The GSP family keeps growing… Here's our first addition for 2001: (1) Name: Jared Micah Ellis; (2) Date/Time: January 18, 2001, 7:03 p.m.; (3) Weight: 7 lbs, 6 oz; (4) Length: 20 inches; (5) Mom: "Excited" and resting comfortably; (6) Dad: Already teaching Jared how to underwrite "asset based, quick-close" transactions. See Jared's Picture
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| * GSP is an L.A. correspondent for ARCS Commercial Mortgage, the nation's largest FNMA/DUS originator. |
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