$17,200,000 Construction Loan - FINfacts

KEY RATE INDICES

FANNIE MAE RATES *

Prime Rate	4.00%
11th District	1.811%
3 Mo. T’s (YTM)	0.94%
6 Mo. T’s (YTM)	1.02%

5 Yr. U.S. T’s	3.13%
10 Yr. US T’s	4.14%
30 Yr. US T’s	4.97%
12-MAT	1.229%

LIBOR - 1 mo.	1.09%
LIBOR - 3 mo.	1.11%
LIBOR - 6 mo.	1.17%
LIBOR - 1 yr.	1.37%

Tier 2+ (80% LTV)	5.50%
Tier 3+ (65% LTV)	5.32%
Tier 4+ (55% LTV)	5.12%
10 yr. term/30 yr. amort.

TRANSACTION OF THE WEEK

$17,200,000 Construction Loan (88% of Cost) for the Office-to-Lofts Conversion and Ground Up Development of 49 “For Sale” Units in the Miracle Mile of Los Angeles, CA: GSP was exclusively hired to obtain financing for this project which includes the conversion of a vintage 1961 steel-frame antiquated office building to 20 lofts and the ground up construction of 25 condos and 4 townhouses. Project Background: In 2001, our client purchased (1) 45,000 s.f, 5-story office building which sits on a 35,000 s.f. lot and (2) a 6,000 s.f. empty lot across the street from the office building used for additional parking. Business plan: (1) Office Building: Successfully re-entitled the property to residential zoning for 20 loft units on the upper four floors. The first floor will become a garage for most of the parking. The upper four floors of lofts will be 1,200-1,400 s.f; (2) The Existing Parking Lot directly behind the office building and provides on grade parking was approved for 4-stories of 25 condos with subterranean parking serving both the building and the shortfall from the loft building; (3) The 6,000 s.f. Lot Across the Street: was re-entitled to residential to construct four luxury townhouses averaging 2,000 s.f.; (4) The project’s retail value will be $31,000,000 at completion Challenges: Borrower is a successful tract homebuilder and land developer transitioning to urban infill developments: (1) His first conversion of office-to-lofts and vertical condominium development in an urban in-fill location; (2) No comparables for lofts in the immediate area (Closest comps: Downtown LA and West Hollywood). The lender conducted their own market study to get a comfort level that the pro-forma sales can be achieved. Lender required 10 pre-sales on prior to construction of the 25 unit condo building. GSP arranged 88% of cost financing. Loan Terms: (1) Rate: Prime + 1.00%; floor of 5.50%; (2) Term: 21 months with 2 each 3 month options at 25 bps; (3) LTV: 65.00%; (4) LTC: 88.00%; (5) Loan per Unit: $351,000; (6) Lender Fee: 1.00%; (7) Recourse. (George Smith, Joel Simaie)

$2,500,000 Cash Out Refinance for “At-Grade” ¾ Acre Parking Lot in Downtown Los Angeles: Laker fans are familiar with this lot, conveniently located near the Staples Center. The property is unimproved, with no structures. Our borrower has owned the property for 6 years and has recently leased it to a major operator. Lease Term: 5 years. Note: Lender was willing to fund up to a 65% loan. Terms: (1) Rate: 6.00%, Fixed; (2) Term/Amort: 5/20; (3) LTV: 50% (as raw land); (4) DCR: 1.25; (5) Prepayment: 3, 2, 1, 0, 0; (6) Recourse; (7) Lender Fee: 1.0%. (David Stepanchak, George Smith)

$2,875,000 Permanent Financing for 15,628 s.f. Strip Retail Center in Boise, Idaho: This financing replaced borrower’s construction loan and returned equity to 100% of total development cost. Lender funded at certificate of occupancy. Property Specs: 7 national and regional tenants, shadow anchored by large home improvement center, single story, 100% occupied. Lender became comfortable with secondary market due to in-fill nature, strong demographics and recent retail development occurring in the submarket. Terms: (1) Rate: 10 year T + 1.45%; (2) Term/Amort: 10/30; (3) LTV: 75%; (4) DCR: 1.25 (on actual, no stress constant underwriting); (5) Non-recourse; (6) Par. (David Stepanchak, Steven Hamermesh)

SPEAKER'S CORNER

Gary E. Mozer will be participating in a Financing Panel: “Middle-Income Housing: A Westside Oxymoron?” The event is sponsored by Westside Urban Forum on April 16th at The Regency Club. For more information, visit www.westsideurbanforum.com or call 310-394-0253.