The Latin Retail Marketplace

$13,000,000 Permanent Loan & "Crop Line" for 5 Farms in Fresno Area: GSP has arranged agricultural loans for a prominent farmer in the Northern San Joaquin Valley. Property/Collateral Specs: (1) 912 acres of farmland (5 separate farms); (2) Two packing plants (160,000 sf. total) and one cold storage plant (30,000 sf.). Main crops: Peaches, plums, and nectarines. FinFax fun fact: 90% of the peaches consumed in the Northern Hemisphere are grown in the Fresno area. Challenges: (1) Lender went through a merger during loan processing- the acquiring bank had no agricultural lending group and still funded this transaction; (2) The farming industry in Fresno decreased profitability significantly in 2001 and 2002 causing difficulty to any farm loan request. The transaction was placed on behalf of an investment client, Larry Hurwitz of the Lawrence Financial Group. Loan Terms: (1) Loan Amount: $7,000,000; (2) Rate: Prime + 0.50% (no floor or ceiling); (3) Term/Amort: 10/15; (4) Lender Fee: 1.0%; (5) Prepayable or convertible to fixed rate at any time for no fee. Crop-Line: (1) Loan Amount: $6,000,000; (2) Rate: Prime + 0.5%; (3) Lender Fee: par; (4) 12 month line renewable annually at lender's discretion. Overall Terms: (1) Recourse; (2) Combined LTV: 60%; (3) Combined DCR: 1.25. (Michael Schwartz)

$3,450,000 Cash-out Refinance for 1970's Vintage 30 Unit Apartment Complex in Pasadena: Sid Wallis, GSP's Chairman Emeritus, remarked "The Old Guys Do It Again." Sid, still going strong at 82, worked with a 76 year old loan officer and a 71 year old borrower- break out the slide-rules and "back of the envelope" underwriting! Sid placed financing tailored to borrower's wishes- flexibility without hefty prepayment penalties. Property Specs: 1 building, 2 stories, 100% occupied, well-located, slightly below- market rents. Terms: (1) Rate: 6 month LIBOR + 2.20% (No floor, 10.25% ceiling); (2) Term/Amort: 30/30; (3) LTV: 75%; (4) DCR: 1.30; (5) Non-recourse; (6) Prepayment: 1% in years 1-3, open thereafter; (7) Lender Fee: 1.0%. (Sid Wallis)

$2,475,000 (75% of cost) Acquisition/Bridge Financing for 48,000 sf. Multi-Tenant Industrial Property in Northeastern Los Angeles County: GSP has arranged financing for this mid-80's vintage, 96% occupied, 31 tenant industrial complex containing small business owners with 1,200-1,800 sf. spaces. Most tenants had substantially below market rents and were on month-to-month leases. However, the submarket is extremely strong, with several like properties wedged in an area bordered by a major freeway and surrounding hills. Bridge component: Our borrower, an experienced operator of industrial properties, plans to spend approximately $100,000 in renovations, bring rents to market levels and operate the property more efficiently than seller. Floating rate financing and M-T-M leases allowed borrower to stabilize property and set-up for future perm. Challenge: To find a lender who would underwrite on market rent- not actual rents, who wasn't concerned with the M-T-M leases and who could close within the eight week acquisition schedule. Terms: (1) Rate: 6 month LIBOR +3.25% (Floor: 6.25%, Ceiling: 11.50%) rate adjusts quarterly; (2) Term/Amort: 2 years/interest only; (3) LTC: 75%; (4) Lender Fee: Par; (5) Recourse. (Steve Bram, David Pascale, Jr., John Lopez)

Interest Rate/CMBS Update: Treasuries: The 10 year T has roller-coastered lately, whipsawed by conflicting economic data, Fed easing, etc. The 10 year is currently at 4.06%. CMBS: Demand has "hiccupped" slightly in the past week as 10 year AAA pricing approached Swaps + 50, approximately a 5 bp widening. Swaps themselves have returned to 10 year T + 50, after recently narrowing to a level not seen since February 1998: approximately 10 year T + 45. All-in mortgage rates continue to be in the sub 6.00% range with lenders continuing to drop their floors. Stay tuned… (David R. Pascale, Jr.)

Shopping centers that attract the Latino customer offer compelling development opportunities. These retails centers, such as Broadway in downtown Los Angeles, command higher rental rates than comparable non-Latino oriented store locations within the surrounding markets. Stores in these markets often generate higher sales per sq. ft. than stores in more prestigious locations. Other Highlights: (1) Demographics: 4.5 million Latinos in Southern California; (2) Purchasing Power: over $1 billion per month; (3) Shopping Center features: bilingual signage, movie theaters with subtitles, entertainment and promotions centered around Cinco de Mayo and other cultural holidays. (Larry Wilemon)