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| KEY RATE INDICES |
FANNIE MAE RATES * |
| Prime Rate |
4.75% |
| 11th District |
2.653% |
| 3 Mo. T’s (YTM) |
1.75%
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| 6 Mo. T’s (YTM) |
1.92% |
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| 5 Yr. U.S. T’s |
4.59% |
| 10 Yr. US T’s |
5.24% |
| 30 Yr. US T’s |
5.75% |
| 12-MAT |
2.787% |
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| LIBOR - 1 mo. |
1.84% |
| LIBOR - 3 mo. |
1.91% |
| LIBOR - 6 mo. |
2.12% |
| LIBOR - 1 yr. |
2.68% |
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| Tier 2+ (80% LTV) |
6.81% |
| Tier 3+ (65% LTV) |
6.63% |
| Tier 4+ (55% LTV) |
6.43% |
| 10 yr. term/30 yr. amort. |
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TRANSACTION OF THE WEEK!
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$13,800,000 -7.31% Fixed Rate for Two Secondary Market California Mobile Home Parks Built in the Early 1970's: You are never too old. This placement is a tribute to the dogged determination and experience of GSP's Chairman Emeritus, Sid Wallis-going strong at 82 years "young" for his 70 year old borrower. Property Characteristics: Park #1: Central California resort area, 5-star, 162 double-wide spaces, 9-hole golf course, pool, spa, clubhouse, excellent landscaping, 33 acre site, RV/Boat storage. Park #2: Northeastern San Diego County (located in the middle of a state park), 5-star, 324 double-wide lots, 18 hole executive golf course, beautiful desert setting/well kept grounds with lake "centerpiece", 7,700 s.f. clubhouse, heated pool, spa, tennis courts, 164 acre site. The owners developed the parks in the early 1970's. The tenants are typically 10 years or longer in residence. Occupancy for both parks has been 97-100% for years. Challenges to the financing: (1) Secondary markets and (2) Park #2 is located in a "flood plain" causing this loan to fall out of application with two lenders over the flood issue. Sid worked the phones (using his rolodex of course!) quantifying the flood risk with several engineers and then found a lender who "could quantify this issue". Sid placed the transaction with an American subsidiary of a Belgian banking consortium that does securitized lending. What the Refinancing Accomplished: (1) $3 million cash-out, (2) lower debt service (3) lower interest rate and re-amortizing to 30 years. Terms: (1) Loan Amount: Park #1-$4,925,000, Park #2-$8,875,000; (2) Rate: 7.31% (10 yr T's + 2.10%); (3) Term/Amort: 10/30; (4) LTV: 70%; (5) DCR: 1.20; (6) Non-recourse; (7) Lender Fee: 1.0%. (Sid Wallis)
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| $4,500,000 for 2 "Mature" Single-Tenant Warehouse Buildings in Southeast L.A. County: GSP has arranged acquisition financing for two short term leased industrial buildings located in two separate submarkets. The transactions closed simultaneously (same seller), with 2 uncrossed loans from the same lender. Property #1: Built in 1954; 65,500 s.f.; 8% office buildout; 50% site coverage; 21-23 foot clear heights; 4 dock doors; covered loading dock; rail access. Property #2: Built in 1969; 60,000 s.f.; 7% office buildout; good street frontage; 57% site coverage; 24 foot clear heights; 3 dock doors; 1 grade level door. Both properties have 3 years remaining on their leases with private company tenants. Lender got comfortable with the rollover risk due to solid locations within strong submarkets. Process: (1) Streamlined "small CMBS" loan program; (2) 35 day close from application; (3) Legal fees capped; (4) Minimal reports. Terms: (1) Loan Amounts: Prop #1: $2,200,000, Prop #2: $2,300,000; (2) Rate: 10 year T + 2.48%; (3) Term/Amort: 10/30; (4) LTV: 75%; (5) DCR: 1.25; (6) Non-recourse; (7) Lender Fee: Par. (Henry Bryan; George Smith) |
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HOT MONEY!
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| LIBOR based (No Floor) Bridge Program With Innovative "Mezz Topper"! Portfolio lender getting aggressive, available nationwide. Program Highlights: (1) Loan Size: $6,000,000 and up; (2) Loan Terms: 18-48 months; (3) LIBOR index (borrower chooses 30, 60, 90 or 180 day LIBOR); (4) Spreads: 2.40-3.00%; (5) Lender Fee: 1.0% origination, 0.5%-1.0% exit (exit is waived if same lender does the perm); (6) Property Types: Apt, Industrial, Retail, Office (No hospitality or health care); (7) Non-recourse for DCR's of 1.25 and above. For 1.00-1.25 DCR transactions, some level of recourse is required, usually the top 25%. Also, borrower may accept recourse for some reduction in spread, lender sizes using 8.50% constant.
Mezz topper: However, lender will use their internal mezz source and an "A/B" structure to keep the loan non-recourse even for sub 1.25 DCR's. Example: They are financing the acquisition of a $17,000,000 industrial building, loan to cost is 80%. The "A" piece is $12,000,000 with a 1.35 DCR and is priced at LIBOR + 3.00%. The "B" piece (mezz) is $1,600,000, priced at LIBOR + 4.75%, pushes the combined DCR to 1.20. The loan is "one note" with a blended rate. Note: B piece must be $1,000,000 minimum for this structure.
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SPEAKER'S CORNER
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| George A. Smith will be addressing real estate and management students at Cal State Northridge University on June 12th as part of the Lambda Alpha International Lecture Series. For more information on Mr. Smith's speaking availability, please contact Jim Neuman, Director of National Business Development at ext. 112 or jneuman@gspartners.com. |
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| * GSP is an L.A. correspondent for ARCS Commercial Mortgage, the nation's largest FNMA/DUS originator. |
| Note: Lender pricing and loan points are subject to change and exclude GSP loan placement fees. |
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