Portfolio Lender Rolls Out Year-End Money Sale

KEY RATE INDICES FANNIE MAE RATES * Prime Rate 4.00% 11th District 1.946% 3 Mo. T’s (YTM) 0.95% 6 Mo. T’s (YTM) 1.02% 5 Yr. U.S. T’s 3.08% 10 Yr. US T’s 4.18% 30 Yr. US T’s 5.09% 12-MAT 1.302% LIBOR - 1 mo. 1.12% LIBOR - 3 mo. 1.17% LIBOR - 6 mo. 1.24% LIBOR - 1 yr. 1.50% Tier 2+ (80% LTV) 5.83% Tier 3+ (65% LTV) 5.65% Tier 4+ (55% LTV) 5.45% 10 yr. term/30 yr. amort. TRANSACTION OF THE WEEK! $16,000,000 Permanent Financing for 68-Unit Ultra Luxury Apartment Complex in Malibu: GSP has arranged cash-out financing for this resort-like condo development turned apartment community located just off PCH on a private road and across the street from Zuma Beach. Our client purchased this project from the original construction lender in April 2000. It was delivered 100% vacant at the time and required approximately $6,000,000 in construction and rehab over a 3 year period; restoring it to "like new" condition. Property Specs: 4 identical 17-unit buildings, each containing a variety of 2 & 3 bedroom/2.5 - 3.5 baths, single and multi-story floor plans averaging 2,000 sf. Many of the units have direct ocean views, lofts, and all feature spacious private outdoor living areas. Common area amenities include tennis courts, swimming pool, spa, putting green, and outdoor fitness course including jogging trail. At application in July, occupancy was approximately 60%. At the time of funding, occupancy had risen to 85% (30% of which consisted of 9-month "student leases"). The loan amount and funding was predicated on achieving a minimum 80% occupancy, along with a DCR test. Terms: (1) Rate: 10 year T + 1.45%; (2) Term/Amort: 10/30; (3) LTV: 60%; (4) DCR: 1.30; (5) Non-recourse; (6) Lender Fee: Par. (Andrew Levant) $8,250,000 Low Leverage (55% LTV) Refinance for a 64,000 s.f. 1970's Vintage, Theater Anchored Shopping Center in Sherman Oaks, CA: Center was purchased by the borrower in 1985. The property has had 100% occupancy for the past 5 years. Tenants: 38 tenants, average size 1,500 s.f., largest tenant is a 5-screen, "slope floor", theater which represents 22% of the income, 25% are national tenants, the rest are "mom and pop" locals. Majority of tenants pay 15-25% below market rents, owner does this for the sake of tenant retention. Borrower has spent approximately $1.5 million in capital improvements in the last 10 years. Challenges: Borrower plans to rezone the property from retail to retail/mixed use to allow for future development of a 100 unit free-standing apartment complex at the rear of the property. Borrower anticipates rezoning to take 2 or 3 years, plus 12 months of construction/stabilization. Solution: Non-recourse portfolio lenders could not get comfortable with a theater anchor that doesn't report sales; and the borrower did not want a recourse loan. Due to the low leverage and the excellent location, GSP was able to structure a non-recourse loan with a CMBS lender-also the servicers agreed to cooperate with the borrower with respect to the rezoning. Terms: (1) Rate: 5 year T + 2.30%; (2) Term: 5 years; (3) Amortization: Interest Only; (4) LTV: 55%; (5) DCR: 1.90 at an 8.00% constant; (6) Non-recourse; (7) Lender Fee: Par; (8) No SPE requirement, no reserves and lender allowed insurance provider to waive the "Lender as additional insured" provision; (9) Prepayment: locked out for 3 years, then par. (Michael Schwartz) $1,650,000 Permanent Financing (5.75% Fixed Rate) for an 15,556 Unanchored Strip Center in Bakersfield, CA: GSP has arranged financing for a 100% occupied, seven tenant unanchored strip center located at a major I-99 freeway intersection in Bakersfield. The center was built in 1986 by the borrower, who has owned and managed the property since that time. One tenant, representing 8% of the net rentable area is on month-to-month lease. The loan was arranged with a portfolio lender and closing costs, including third party reports were $6,000. This lender offers non-recourse financing when most portfolio lenders would require recourse. Loan was apped at $1,550,000 and increased during processing. The power of FinFax: a FinFax reader noticed this loan program in the 'Hot Money' section of Finfax in July, and then sent all the property information to GSP along with the FinFax article circled with a note: "Get me this loan for the attached property." Terms: (1) Rate: 5.75% per annum for the first five years, after which the loan converts to LIBOR + 3.5% (5.75% floor, 11.875% ceiling); (2) Term/Amort: 10/30; (3) LTV: 75%; (4) DCR: 1.35; (5) Lender fee: par; (6) Non-recourse; (7) Prepayment penalty 3% for the first two years, 2% in years 4-5, 1% in years 5-6 and par thereafter. (Michael Schwartz) $5,320,000 Floating Rate Loan for 2 Property Industrial Portfolio Totaling 145,646 Rentable sf.: GSP arranged $5,320,000 of floating rate financing for the acquisition of two Class B, multi-tenant industrial properties located in Palmdale and Upland, CA. Challenges to the transaction included: (a) limited financial history was available for the properties, and (b) the timing to close the transaction was tight. The loan was closed 31 days after the date of application. Financing: (1) Pricing: LIBOR + 2.50%, no floor; (2) Term/Amort: 5/25; (3) LTV: 70.00%; (4) Prepayment: open; (5) Recourse; (6) Lender Fee: 1.00%. (Larry Wilemon) HOT MONEY! Portfolio Lender Rolls Out "Year-End Money Sale" with Fixed Rates as Low as 10 year T + 1.00%! Non-recourse! This lender wants to originate some volume over the last two months of 2003. Note: the loans may close in early 2004; lender wants to put them under application and circle rate before year-end. Pricing: T + 1.00% is available for low leverage (up to 55%), "full" leverage (75% of appraised value) is priced at T + 1.25%. Other Program Highlights: (1) Loan Size: $13,000,000-$30,000,000; (2) Term/Amort: 10/25; (3) Minimum DCR: 1.25; (4) Flexible on reserves, rate lock at app, secondary financing allowed; (5) Non-recourse. The 9th Annual GSP Real Estate Luncheon Another Overwhelming Success!!! Our heartfelt thanks to all who attended & supported the A-T Medical Research Foundation.... Exciting information forthcoming regarding The 2004 EXECUTIVE LUNCHEON SERIES!