Attention Apartment Owners - FINfacts



Volume IX, No. 1		January 5, 2001

KEY RATE INDICES

FANNIE MAE RATES *

Prime Rate	9.50%
11th District	5.607%
3 Mo. T’s (YTM)	5.10%
6 Mo. T’s (YTM)	4.98%

5 Yr. U.S. T’s	4.66%
10 Yr. US T’s	4.93%
30 Yr. US T’s	5.41%
12-MAT	6.108%

LIBOR - 1 mo.	5.93%
LIBOR - 3 mo.	5.69%
LIBOR - 6 mo.	5.52%
LIBOR - 1 yr.	5.37%

Tier 2+ (80% LTV)	6.95%
Tier 3+ (65% LTV)	6.77%
Tier 4+ (55% LTV)	6.57%
10 yr. term/30 yr. amort.

TRANSACTION OF THE WEEK!!!

$12,000,000 ($413/s.f.!) Permanent Financing for Single Tenant Non-Credit Grocery Store on Old Chasen's Site: GSP placed the construction financing for this approx. 29,000 s.f. Bristol Farms build-to-suit in December 1999. It has been open for approximately 6 weeks. The store is a "state of the art" luxury supermarket featuring gourmet ready-to-eat and packaged food items. The in-store café includes the original Chasen's restaurant's famous booths and an old Hollywood ambience. Challenges to financing included providing rental "comps" for such a large single tenant property and placing a fully leveraged non-credit, single tenant transaction in today's lending market. Property "plusses" include excellent demographics in an area underserved by high-end grocery stores and an experienced retail owner as sponsor. Terms: (1) Rate: 8.00%; (2) Term/Amort: 10/30; (3) LTV: 74%; (4) DCR: 1.25; (5) Non-recourse. (Gary E. Mozer, Peter Smyslowski)

$5,522,000 Acquisition Financing for 100,000 s.f. Grocery/Drug Anchored Shopping Center in Tertiary Market with Unusual Ownership Structure: This 100,000 s.f., 22 tenant center is located in a small agricultural town in central California. The property is the only full-service shopping center in town. The grocery and drug anchors are each approximately 32,000 s.f. The remaining tenants are a mix of national chains and local businesses mostly in the 1,000-2,000 s.f. range. Occupancy: 98%. The borrowing entity consists of 10 tenants-in-common which were not single purpose entities. GSP arranged acquisition financing with a CMBS lender able to get comfortable with both the borrowing entity and the location. This is the 5th funding arranged by GSP for this borrower, all with tenant-in-common ownership. Terms: (1) Rate: 10-year T + 2.45%; (2) Term/Amort: 10/30; (3) Loan-to-Cost: 76%; (4) DCR: 1.25; (5) Non-recourse; (6) Lender Fee: Par. (Steve Bram, David R. Pascale, Jr.)

WSJ Mid-Year 2000 Economist Survey Recap: We always enjoy looking back at the "expert" predictions and comparing them to the actual figures. 53 economists participated in the June 30 survey. Their average prediction for the 30-year T at yearend: 6.01%. Actual: 5.42%. Only 14 of them predicted it at under 6%, only 4 were 5.5% or under. The consensus on the 3-month T was a little closer: 6.11% (Actual: 5.71%). For 3rd Quarter GDP, the consensus was 3.4% with only 7 economists coming in at under 3.0%. Actual: 2.2%. As expected, the January 2001 predictions are considerably more bearish across the board… more on that next week. (David R. Pascale, Jr.)

HOT MONEY!

Attention Apartment Owners -- Compare Fannie Mae with Floating Rate Based Programs: Note: Fannie pricing in our rate chart (especially Tier 2, 80% LTV, 1.25 DCR=6.95%). This is due to the dramatic fall in Treasury yields and investor appetite for government guaranteed Fannie Mae bonds. Bond buyers look at the Fannie credit and not the real estate. These fixed rates are substantially lower than the available all-in floating rates for fully leveraged loans indexed off of LIBOR, 12-MAT, 11th District and Prime.

Index	Latest Rate	Spread	Rate
1-month LIBOR	5.93%	2.50%	8.43%
3-month LIBOR	5.70%	2.50%	8.20%
6-month LIBOR	5.52%	2.50%	8.02%
12 MAT	6.11%	2.25%	8.36%
Prime	9.00%	1.00%	10.00%
11th District	5.61%	2.75%	8.36%

Also, borrowers may take advantage of Fannie Mae's "evergreen" program as the property increases in value. Fannie will provide a second mortgage, third mortgage, etc. at then prevailing fixed rates if the borrower wants to remain fully leveraged. Remember, there are no additional fees to process Fannie Mae loans through GSP.

* GSP is an L.A. correspondent for ARCS Commercial Mortgage, the nation's largest FNMA/DUS originator.