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| KEY RATE INDICES |
FANNIE MAE RATES * |
| Prime Rate |
4.50% |
| CODI* |
1.118% |
| 3 Mo. T’s (YTM) |
1.70%
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| 6 Mo. T’s (YTM) |
1.90% |
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| 5 Yr. U.S. T’s |
3.34% |
| 10 Yr. US T’s |
4.12% |
| 30 Yr. US T’s |
4.91% |
| 12-MAT |
1.522% |
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| LIBOR - 1 mo. |
1.82% |
| LIBOR - 3 mo. |
1.91% |
| LIBOR - 6 mo. |
2.06% |
| LIBOR - 1 yr. |
2.28% |
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| Tier 2+ (80% LTV) |
5.30% |
| Tier 3+ (65% LTV) |
5.16% |
| Tier 4+ (55% LTV) |
5.02% |
| 10 yr. term/30 yr. amort. |
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TRANSACTION OF THE WEEK
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| $19,500,000 Consisting of a $10,000,000 2nd “Private Party” Land Loan Subordinated to an Existing $9,500,000 “Private Party” 1st Mortgage Loan: In one of the more unusual and “one of a kind” structured GSP financings, a $10,000,000 2nd mortgage land loan was Privately Placed. Property: The collateral consists of approximately 55 acres of improved commercial land currently zoned for commercial, industrial and retail development. The property is in the process of being down-zoned to medium density residential (800 units on approximately 41 net acres). The Inland Empire property was acquired several years ago by a family trust that owns several large land assemblages. The site is graded with all infrastructure including an interior street and utilities to each of the contiguous parcels. Re-Zoning Objective: With the significant residential growth in this sub-market over the past five years, the land is now considered “in-fill” with surrounding residential subdivisions including apartments and town homes as well as anchored neighborhood retail centers. Exhaustive market research indicated the “highest and best use” with the “fastest absorption” for the site is residential development. This use is supported by the surrounding Home Owner Associations. Upon rezoning, the land value will have increased by 400%. Private Party 2nd Mortgage Financing Structure: (1) There is an existing Private Party 1st Mortgage for $9,500,000 with 12 months remaining on the loan term at a 12% rate. The 2nd mortgage lender has the right to replace the 1st mortgage. If the 2nd mortgage lender is able to obtain a lower rate for the 1st mortgage tranche, the 2nd lender benefits from the arbitrage (2) The combined 1st and 2nd mortgages of $19,500,000 is approximately 78% of the “as-is” (commercial, industrial, retail) appraisal’s discounted cash flow value based upon projected land absorption rates. Purpose of New Financing: The borrower/owner was seeking to liquefy their balance sheet and take advantage of several opportunities to option additional land. They have over 30 years experience in the land entitlement and development business. 2nd Mortgage Financing Terms: (1) Type: 2nd mortgage land loan; (2) Loan: $10,000,000; (3) Term: 12-months with renewal options; (4) Rate: 12% rate accruing and compounding; (5) Exit Fees are subject to a Confidentiality Agreement. If re-zoning and the construction schedule are achieved the IRR including exit fees and arbitraging the first mortgage is expected to exceed 50%; (6) The 2nd mortgage lender has the right to refinance the senior loan and capture the arbitrage between the current 12% rate and the refinancing rate providing arbitrage in the 6% range bringing the yield on the 2nd mortgage to approximately 18% before the exit fee “kickers.” (7) No warm body guarantees on the loan or the “bad boy” carve outs. This is a true “asset based loan.” (George Smith, Joel Simaie) |
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| $3,400,000 Cash-Out Refinance of a 97,000 s.f Multi-Tenant Simi Valley Industrial Center on Leasehold: GSP was successful in meeting all of the borrower’s criteria including non-recourse, local servicer/portfolio lender and flexible prepayment options. The borrower owned the subject property for approximately 15 years and was seeking a moderate cash-out at a sub-60% LTV. This class-B industrial center (97% occupied with one vacant space) is subject to a 95-year ground lease, currently in its 20th year. Terms: (1) Pricing: 12 MAT + 2.85%; (2) Term/Amort: 15/30; (3) LTV: 59% (4) DCR: 2.75; (5) Non-recourse; (6) Pre-payment: 2%, 2%, 1%; (7) Lender Fee: Par (8) Costs: Minimal 3rd party costs with in-house legal and no Phase 1. (David Stepanchak, Allison Higgins) |
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GSP's NEXT GENERATION OF BROKERS
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As part of our continuing series profiling GSP's "Next Generation" of Brokers…
GSP Welcomes Noah Hahn: Mr. Hahn joined GSP in January 2004, while completing an MBA at USC’s Marshall School of Business. Prior to receiving his MBA, Mr. Hahn worked as a financial analyst/originator for Onyx Capital, an exclusive correspondent for Sun America/AIG. During his time there, he underwrote $350,000,000 in financing. He also spent time living in Costa Rica pursuing various real estate development and investment opportunities while becoming a world class surfer. Mr. Hahn recently sourced and closed a significant land transaction in Hawaii (see next week’s FinFax for details) and has multiple transactions in his pipeline. His undergraduate education was completed at the University of Wisconsin. Noah’s wife, Sara, is a 5th grade teacher in LAUSD. Noah Hahn can be reached at ext 138 or nhahn@gspartners.com.
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10th Annual GSP Real Estate Luncheon
(To Benefit the A-T Medical Research Foundation)
SAVE THE DATE!
Wednesday,November 17, 2004
| The 10th Annual GSP Real Estate Luncheon to benefit the A-T Medical Research Foundation will be held on Wed., November 17th at the Century Plaza Hotel. |
FEATURED GUEST SPEAKER
John E. Anderson
President & Sole Shareholder, Topa Equities, Ltd.
Registration materials will be available soon...
MARK YOUR CALENDARS NOW!!
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