CMBS Update...CEO Gary E. Mozer Attended

CW Capital, one of the nations leading HUD mortgage originators has selected George Smith Partners as a new correspondent. Our borrowers can now take advantage of HUD's lending programs for Multifamily and Health Care through GSP without incurring additional fees. About CW: CW Capital (formerly called Continental Wingate Capital) is a national, full-service lender to the multifamily and commercial real estate industries. CW Capital began its lending operations in Boston, MA in 1972, and became a national lender and mortgage banker in 1992. They have 100 employees located in 9 offices throughout the U.S. Since 1994, the Company has closed over $4 Billion of multifamily and commercial loans in 41 states and services $4.5 Billion of multifamily and commercial loans in 48 states. CW Capital services all loans, which it closes in order to provide continuity to borrowers for the life of their loans. For the year ending September 30, 2001, CW Capital was the #1 direct originator of HUD multifamily and seniors housing loans in the country, with $292 Million of loans originated, underwritten and closed. In addition, CW Capital is the #1 HUD lender for skilled nursing and assisted living facilities for the fiscal year. Along with GSP's existing correspondent relationship with ARCS, the nation's #1 Fannie Mae lender, the CW Capital relationship adds to the wide spectrum of capital sources GSP is able to access for our clients.

HUD Programs

Section 221 (d)(4): New Construction or Substantial Rehab of Apartment Properties: (1) Loan Size: $3,000,000 and up; (2) Term/Amort: 40/40, Construction loan which converts to a 40 year fully amortizing loan; (3) Fixed Rates now in the 7.00%-7.25% range, plus mortgage insurance premium; (4) Loan amount up to 90% of replacement cost, underwritten at a 1.11 DCR; (5) Non-recourse.

Section 223 (f) Apartment Refinance or Acquisition: (1) Loan Size: $3,000,000 and up; (2) Fixed rates now in the 6.75%-7.00% range, plus mortgage insurance premium; (3) Term/Amort: 35/35; (4) Loan amounts up to 80-85% LTV: at a 1.17 DCR; (6) Non recourse.

Section 232 Refinance or Purchase of Skilled Nursing and Assisted Living Facilities: (1) Eligible Properties: Skilled nursing, assisted living, intermediate care, board and care facilities. Properties must be state licensed; (2) Loan Size: $3,000,000 and up; (3) Fixed Rates now in the 6.75-7.00% range does not include mortgage insurance premium; (4) Loan amount up to 85% of cost, underwritten at 1.17 DCR; (5) Term/Amort: 35/35; (6) Non-recourse.

Section 232 New Construction or Substantial Rehab of Skilled Nursing: (1) Eligible properties (same as above); (2) Loan Size: $3,000,000 and up; (3) Loan Amount up to 90% of appraised value or 100% of total rehab cost, underwritten at a 1.11 DCR; (4) Term/Amort: 35/35; (5) Non-recourse.

Please contact your GSP representative for additional information.

$7,800,000 (6.62% Fixed Rate) Cash-Out Refinance, Loan Closed in 45 Days! GSP, through our correspondency with ARCS Commercial Mortgage, has arranged Freddie Mac financing for this early 1970's vintage garden apartment complex. Property Specs: 7.5 acres; 15 separate 2-story buildings; 98% occupied; 192 Units (128 1 Bed/1 Bath, 64 2 BD/1 Bath); 88 units are master metered for gas and have no dishwashers, the balance are individually metered and have dishwashers; 2 swimming pools; BBQ area; 174 covered parking spaces. All units contain plush carpeting, air conditioning, patio or balcony and storage area. Good, in-fill location in southern Los Angeles County. ARCS/Freddie closed the loan in record time to accommodate borrower's need to acquire another property and increased proceeds after application. Terms: (1) Rate: 6.62%; (2) Term/Amort: 15/15; (3) LTV: 60%; (4) DCR: 1.25; (5) Lender Fee: 1.0%; (6) Prepayment: yield maintenance; open to prepayment without penalty in last 180 days. (Mike Gottlieb)

CMBS Update...CEO Gary E. Mozer Attended a Seminar Hosted by a Major CMBS Originator: Mr. Mozer met with senior management, loan officers, traders and research analysts at the two day event. Highlights: (1) CMBS is outperforming most fixed rate debt instruments including U.S. Treasuries, agency debt (Fannie, Freddie, etc), corporates, residential MBS and ABS. Why? Duration (10 year terms, tied to treasuries), very low default rate, stable performance for AAA bonds, etc; (2) CMBS production is down from $74 billion in 2001 to a projected $59 billion this year. This is partially attributable to a drop off in large loans ($50 million and up) due to difficulties with terrorism insurance; (3) Demand is high: A recent rules change allows pension funds to invest in sub AAA bonds, banks have lower reserve requirements for CMBS bond purchases, more activity in the CDO (Collateralized Debt Obligation) market; (4) Prediction: Default rates will rise, but remain lower than other asset backed sectors, spreads to remain tight.