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| KEY RATE INDICES |
FANNIE MAE RATES * |
| Prime Rate |
4.75% |
| 11th District |
3.368% |
| 3 Mo. T’s (YTM) |
1.75%
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| 6 Mo. T’s (YTM) |
1.87% |
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| 5 Yr. U.S. T’s |
4.30% |
| 10 Yr. US T’s |
4.98% |
| 30 Yr. US T’s |
5.40% |
| 12-MAT |
3.481% |
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| LIBOR - 1 mo. |
1.85% |
| LIBOR - 3 mo. |
1.88% |
| LIBOR - 6 mo. |
2.03% |
| LIBOR - 1 yr. |
2.49% |
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| Tier 2+ (80% LTV) |
6.82% |
| Tier 3+ (65% LTV) |
6.64% |
| Tier 4+ (55% LTV) |
6.44% |
| 10 yr. term/30 yr. amort. |
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TRANSACTION OF THE WEEK!
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$14,100,000 (83% of Acquisition Cost) Bridge/Mezzanine Financing for 58% Occupied 282,000 Square Foot Retail Center: GSP has arranged and closed in 35 days a $12,600,000 Bridge Loan and a $1,500,000 Mezzanine Loan for a 1970's vintage, partially enclosed mall located in Ventura County. Challenges to Financing: (1) Substantial vacancy, the center will undergo a complete repositioning upon purchase. A majority of the vacancy is due to the bankruptcies of 3 major tenants since 1998; (2) Functionally obsolete in today's retail environment: indoor/outdoor mall with vacancy in both areas; (3) Located in a secondary market; (4) Many of the remaining tenants are on short-term leases. (5) Seller required a quick close. Business Plan: The borrower intends to lease vacant space either to a single large (100,000 s.f.+) anchor tenant or 2-3 national credit tenant "big box" retailers. In addition, the borrower is planning to completely rehab the interior of the center to include major parking lot improvements, substantial landscaping, new monument signage and façade remodel. Terms: Senior Bridge Loan: (1) Rate: Prime + 2.00% (7.00% interest rate floor); (2) Term/Amort: 24 months/Interest Only; (3) LTC: 70%; (4) DCR: 1.30; (5) Recourse to borrower; (6) Prepayment: Open at par; (7) Lender Fee: 2.0%. Mezzanine Loan: (1) Term/Amort: 24 months/Interest Only; (2) Remainder of terms: Confidential. (Gary E. Mozer, Peter Smyslowski, Mark Wintner)
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| $4,000,000 (90% of Cost) Non-Recourse Construction/Permanent Loan for 72 Unit Student Apartment Complex Adjacent to Major University in Western US: GSP has arranged 90% of cost construction financing for this 72 unit student apartment building. This construction financing is non-recourse and the rate is fixed at 7.60% for the entire 40 year term of the loan. The loan is assumable after construction has been completed. While the use of the project will be for students, the loan was underwritten at market rents and occupancy. Student apartments usually have more tenants per unit, which translates into above market rental rates. Terms: (1) Rate: 7.60%, (2) Term/Amortization: 40/40 (3) 90% LTC, 75% LTV; (4) Lender fee: 2.00 %; (5) Prepayment: 5 year lockout, then 5-4-3-2-1, then par for the life of the loan. (Mike Gottlieb, Jim Neuman) |
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| $2,700,000 Acquisition Financing (74% of Purchase Price) for 35,000 s.f. Multi Tenant Office Building in Ventura County: GSP has arranged acquisition/permanent financing for this 3-story, 1978-built office building in downtown Ventura. Occupancy: 100% (3 tenants). The property was a former regional headquarters for a multi-national corporation. The acquisition includes two contiguous lots for future development. GSP negotiated release prices of $100,000 for each lot. Financing was provided by a portfolio lender with a streamlined "borrower friendly" process. Third parties: Appraisal and $500 environmental policy only-No Phase I report, no engineering report, no legal fees. Also, no reserves! Steven Hamermesh: "This was banking the old fashioned way". Terms: (1) Rate: 6 month LIBOR + 3.50% (6.87% floor); (2) Term/Amort: 10/30; (3) LTC: 74%; (4) DCR: 1.25; (5) Lender fee: Par; (6) Non-recourse. (Steven Hamermesh) |
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INTEREST RATE/CMBS UPDATE
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Treasuries: The bond market rallied late in the week as perceptions about the US Economic recovery changed slightly. The overall consensus is that the recession is ending. Mid-week reports (such as Wednesday's 4Q 2001 GDP of +0.2%) indicated the recovery has begun, and yields rose as high as 5.08% on the 10 year T. However, today's mixed employment data points to a more gradual recovery with more job losses ahead in the coming months. The bond market rallied on the news today, dropping yields below 5.00%. The bond market is also aided by lack of investor confidence in stocks due to the recent disclosures surrounding the Enron situation. The market will be closely watching the new issuance of 10-year notes beginning next week (Feb 4-6), creating a new "on the run" 10 year T. CMBS: The first regular fixed rate conduit transaction priced this week. All bond classes sold well, plenty of liquidity. 10 year AAA's sold at Swaps + 49. Interestingly, the 5 year AAA's, sold at the same spread over Swaps for the first time in memory... Stay tuned. (David R. Pascale, Jr.)
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SPEAKER'S CORNER
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George Smith will be speaking at the following law firms this month: (1) February 19: Pircher, Nichols, Meeks; (2) February 26: Munger, Tolles, Olson; (3) February 27: Cox, Castle, Nicholson. 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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