$17,936,000 Construction Financing - FINfacts

KEY RATE INDICES

FANNIE MAE RATES *

Prime Rate	4.00%
11th District	1.815%
3 Mo. T’s (YTM)	1.02%
6 Mo. T’s (YTM)	1.36%

5 Yr. U.S. T’s	3.90%
10 Yr. US T’s	4.76%
30 Yr. US T’s	5.46%
12-MAT	1.238%

LIBOR - 1 mo.	1.10%
LIBOR - 3 mo.	1.28%
LIBOR - 6 mo.	1.57%
LIBOR - 1 yr.	2.09%

Tier 2+ (80% LTV)	6.13%
Tier 3+ (65% LTV)	5.95%
Tier 4+ (55% LTV)	5.75%
10 yr. term/30 yr. amort.

TRANSACTION OF THE WEEK

$17,936,000 Construction Financing (98.85% LTC) for Southern California Retail: GSP has obtained 98.85% LTC construction financing for a grocer-anchored retail center in Southern California. The center is projected to be approximately 100,000 total s.f. The project was substantially pre-leased at the time of commitment (80%). The financing was structured with a Senior loan and a Mezzanine loan. The developer was allowed to subordinate their developer fee in lieu of new cash contribution (the land was purchased prior to the construction loan closing). Terms: (1) Pricing: Senior loan – Libor + 2.25%; Mezzanine loan – 15.00%; (2) Term/Amort: 3 years interest-only; (3) LTV: 98.85%; (4) Minimum DCR: 1.25; (5) Prepayment: Senior – par; Mezzanine – locked for 12 months, then par; (6) Senior – limited recourse; Mezzanine – non-recourse; (7) Lender Fee: Senior – 0.50%; Mezzanine – 2.00%. (Gary Mozer, Lee Norman, Larry Wilemon)

$14,000,000 Fixed Rate Financing for San Diego Office Building: Subject property is an 82,157 s.f., class A, office property in San Diego County. GSP was engaged to obtain acquisition financing for the property. Issues that were overcome in the transaction included: (a) a lack of supporting rental and sale comparables, because this asset is newer and superior in quality to other properties in the sub-market; (b) a sizeable tenant is dark but still paying rent, with security deposits posted to cover the remaining four years of lease term; and (c) a purchase price that was below the market value of the property. Terms: (1) Pricing: 10-Year T + 1.30%; (2) Term/Amort: 10/30; (3) LTV: 77%; (4) Minimum DCR: 1.25; (5) Prepayment: Yield Maintenance; (6) Non-Recourse; (7) Lender Fee: Par. (Gary Mozer, Lee Norman, Larry Wilemon)

GSP/Rifkind Secures $6,750,000 Refinance for a 2 Tenant Hospital in Los Angeles, CA to resolve a Bankruptcy. Yes, you read that right, a 2 tenant hospital!... GSP has arranged financing for this 108,000 s.f., 1964 built psychiatric hospital in Los Angeles. Tenant #1: Occupying 75,000 s.f, in bankruptcy due to a dispute with its accounts receivable lender. Tenant started business in 1999, first year of profitability was 2003 due to licensing issues, operates in 2 hospitals both owned by borrower. Tenant #2: Occupying 33,000 s.f., government mental health entity, in occupancy since 1997, currently on month-to-month sublease from Tenant #1. Borrower purchased property in 1997 for $4,200,000. New financing replaced first and second TD’s of $8,400,000; 2nd TD lender accepted a discounted note pay off due to tenant #1’s bankruptcy. This loan is 5 years at a fixed rate with no prepayment penalty and is non-recourse. The loan also allows for secondary financing. The certainty of close is key element that allowed the borrower to negotiate the discount. The borrower used the power of our ascending brand to her best advantage! (Mike Schwartz & David Rifkind)

$3,000,000 (80% LTV) Fixed Rate Financing for Retail Center: Subject property is a 14,370 square feet specialty grocery anchored center in greater Los Angeles. Construction was completed in 2004, and the center enjoys a desirable, infill location. GSP arranged financing to replace the existing construction loan. Structuring issues in the transaction included: (a) a permanent loan equal to 97.5% of borrower’s basis, which basis amount included a credit for land contributed by the municipality to the transaction; (b) no sales information for the grocer anchor; (c) a lack of parking in the collateral (although city-owned parking is adjacent); (d) two non-contiguous parcels in the collateral; and (e) high rents per square foot for in-line tenants, with no comparable leases in the immediate area. Financing: (1) Pricing: 10-Year T + 1.40%; (2) Term/Amort: 10/30; (3) LTV: 80%; (4) DCR: 1.25; (5) Prepayment: Defeasance; (6) Non-Recourse; (7) Lender Fee: Par. (Gary Mozer, Lee Norman, Larry Wilemon)