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| Volume IX, No. 2 |
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January 12, 2001 |
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| KEY RATE INDICES |
FANNIE MAE RATES * |
| Prime Rate |
9.00% |
| 11th District |
5.607% |
| 3 Mo. T’s (YTM) |
5.31%
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| 6 Mo. T’s (YTM) |
5.23% |
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| 5 Yr. U.S. T’s |
4.95% |
| 10 Yr. US T’s |
5.24% |
| 30 Yr. US T’s |
5.62% |
| 12-MAT |
6.108% |
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| LIBOR - 1 mo. |
5.88% |
| LIBOR - 3 mo. |
5.68% |
| LIBOR - 6 mo. |
5.51% |
| LIBOR - 1 yr. |
5.39% |
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| Tier 2+ (80% LTV) |
7.15% |
| Tier 3+ (65% LTV) |
7.00% |
| Tier 4+ (55% LTV) |
6.80% |
| 10 yr. term/30 yr. amort. |
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TRANSACTION OF THE WEEK!!!
$12,500,000 (T + 2.10%, 1.22 DCR) Acquisition Financing for 320,000 Sq. Ft. Grocery/Drug/Department Store Anchored Mall in Southern California Secondary Market: This unusually configured indoor/outdoor mall was constructed in 2 phases, in 1960 and 1970. The 91% occupied center features 7 "big box" tenants all 20,000+ s.f. The main anchors are a newly expanded 80,000 s.f. department store and a 40,000 s.f. grocery store. The other large tenants include a discount clothing, drug and office supply national chain retailers. The in-line space is 65% leased and includes several local businesses and some fast-food "pads". Challenge/Solution: Most leases roll during loan term - GSP negotiated TI/LC reserves for the "big box" tenants only, which will be funded through sinking fund accounts established 18 months before each expiration date. Funds will be released to borrower if leases are extended or new tenants are found. Borrower plans to institute hands on management and aggressively lease up the in-line space. Terms: (1) Rate: 10-year T + 2.10%; (2) Term/Amort: 10/30; (3) DCR: 1.22; (4) Loan-to-Cost: 77%; (5) Non-recourse; (6) Lender Fee: Par. (Steve Bram, David R. Pascale, Jr.) |
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| $10,445,000 Construction Financing (84% of Cost) for South Bay Mixed Use (Condominium/Retail) Project: This unusual project is located in a prime "in-fill" location with excellent demographics. Property Specs: (1) 18 Condos: All 3 bedroom/2.5 bathroom, 1,700-1,825 s.f.; (2) Retail: 11,000 s.f., 100% speculative. Note: The property is located on the morning commute drive side of a high traffic count street. This small retail area will be occupied by coffee, juice, and dry cleaner tenants catering to the commuter. GSP arranged 84% of cost financing with a local bank. The bifurcated loan (see below) includes release provisions for the condo units as they are sold. Terms: (1) Rate: Prime + 0.75% (for residential portion: $1,635,000), Prime + 1.0% (for condo portion); (2) Term: 18 months plus one 6-month extension option; (3) Amort: Interest only; (3) Lender Fee: 0.5% (0.125% for extension); (4) Recourse. (Gary E. Mozer, Lee T. Norman) |
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| Wall Street Journal Economist Survey 2001-Can you beat the economists? We love looking at the economists' annual survey and this year we invite our readers to take a shot at predicting. First Prize: A table for 10 at this year's A-T Luncheon. Details and a contest form will follow via fax or email to all subscribers. If you have any questions, contact David Pascale at ext. 117 or dpascale@gspartners.com. What Did The Economists Say For This Year? (1) Interest Rates: Of the 54 economists surveyed, 51 predict the 30 year T will have a "5 handle" (5.00%-5.99%) on June 30th with a consensus of 5.35%. Interestingly, the consensus for the 3-month T is 5.36%. Today the 6-month T is 40 bps below the 30 year. The economists obviously foresee a flattening rate curve. (2) GDP: The economists predict growth picking up during 2001, but not at the levels of the late 90's. Consensus Predictions by Quarter: 2.0, 2.1, 2.8, 2.9%. However, some bearish respondents predict negative GDP or very low figures (sub 1.0%). (3) Unemployment: after a long period at sub 4.0% (several experts consider that "unsustainable") the economists are in agreement that the May 2001 unemployment rate will rise to approx. 4.5% (4.4% to be exact). Get out your crystal balls and watch for contest forms next week! |
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SPEAKER'S CORNER
George Smith will be moderating the Finance Panel at Real Estate Conference Group's "Real Estate 2001" Conference where over 40 Real Estate Leaders will share their outlooks on the new year. Date: January 19, 2001; Location: Century Plaza Hotel (Los Angeles). For more information, call (310) 285-5327 or go to www.realestateoutlook.com.
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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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