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| KEY RATE INDICES |
FANNIE MAE RATES * |
| Prime Rate |
4.00% |
| 11th District |
1.811% |
| 3 Mo. T’s (YTM) |
0.93%
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| 6 Mo. T’s (YTM) |
0.99% |
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| 5 Yr. U.S. T’s |
2.74% |
| 10 Yr. US T’s |
3.78% |
| 30 Yr. US T’s |
4.72% |
| 12-MAT |
1.229% |
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| LIBOR - 1 mo. |
1.09% |
| LIBOR - 3 mo. |
1.112% |
| LIBOR - 6 mo. |
1.15% |
| LIBOR - 1 yr. |
1.29% |
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| Tier 2+ (80% LTV) |
5.08% |
| Tier 3+ (65% LTV) |
4.90% |
| Tier 4+ (55% LTV) |
4.70% |
| 10 yr. term/30 yr. amort. |
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CHAIRMAN MESSAGE
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| “Information and relationships are King in a market where there are more lenders and types of loan programs than there are good deals –” according to George Smith. “In the old days, years would go by where the only time we would meet with lenders were at their offices or at conventions. That is not the case today. With the record GSP volume levels and with more lenders aggressively building origination networks a phenomenon has occurred. Every week, 2 to 3 lenders visit our Los Angeles office. In the 1st 10 weeks of 2003, we have hosted 33 working breakfasts, lunches and briefing sessions. In fact, when lenders come to Los Angeles, a visit to the GSP office is high on most of their list. Our visitors are the ‘decision makers’, i.e. chief credit officers, heads of real estate origination, etc. Year-to-date, we have met with 8 commercial banks (international, national and California based), 7 investment banks (conduit lenders), 7 mezzanine/equity providers, 4 insurance companies, 2 S&L’s/Savings Banks, 3 FNMA/DUS originators and 2 SBA program lenders. We have learned 1st hand of new programs from these face-to-face meetings, several of which have led to loan applications.” |
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HOT MONEY!
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| Five Year Interest Only Under 4.00% Fixed, Non Recourse!! Investment Bank is getting aggressive with cutting edge CMBS pricing. Loan proceeds are sized aggressively: lender will underwrite to a .90 - .95 DCR on the stress constants (9.66 for multifamily, 10.09 for commercial), up to 80% LTV. This helps borrowers buying at today’s cap rates in hot markets gain the necessary leverage. Program Highlights: (1) Loan Amounts: $3,000,000 and up; (2) Rates: 1.10 – 1.70% over the 5 year Treasury, floored at 15 bps below rate at application; (3) Term/Amort: 5 years interest only; (4) Lender Fee: Par.
Innovative CMBS Rate Lock-No Margin Calls! A major CMBS originator is offering this unusual Rate Lock agreement: Borrower deposits 3.0% of loan amount (fully refundable) and receives a 6-month rate lock with no margin call provisions regardless of treasury volatility. Standard rate lock agreements offer 30-60 days of lock period with borrower obligated to deposit further 1.0% increments if Treasury prices rise beyond a pre-determined hurdle.
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$8,000,000 “Unsecured” Revolving Credit Line for Short-Term Capital Needs for a Los Angeles County Based Commercial Real Estate Developer: GSP has arranged 15 revolving credit lines with this lender over the past 2.5 years. This particular lender develops a comfort level with the client's business capability and a comprehensive understanding of his financial condition. The criteria includes a mix of: (1) Liquidity, (2) Predictable operating cash flow, (3) Net worth, (4) Asset control, i.e. sole ownership or LLC interests, (5) Credit worthiness and (6) Deposit potential. The revolving line can be used for short term capital needs of the developer. Terms: (1) Rate: Confidential (indexed to prime); (2) Term: Annual renewal; (3) Deposit Requirement: Confidential; (4) Lender Fee: $25,000. (Gene Brunkhardt)
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$3,300,000 Land Loan For Proposed Condominiums: GSP has arranged financing that allowed our borrower to purchase a 29,000 s.f. industrial building on 73,000 s.f. parcel. The borrower needed a bridge loan to close purchase in 30 days, relocate tenants, finalize entitlements and tear building down. Terms: (1) Rate: 9% fixed; (2) Term/Amort: 1 year interest only with 1 six month extension; (3) LTV: 65%; (4) Prepayment: Guarantee one year lender yield; (5) Recourse: Yes; (6) Lender Fee: 1 point. (George Smith, Henry Bryan)
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$1,000,000 Permanent Financing for 25-Unit Apartment Complex in Burbank: George Smith Partners has arranged financing for this 100% occupied, 1950’s vintage multifamily property. The class-B property consists of a 2-story, 20-unit building plus 5 free standing cottages. It features strong tenant retention with 100% occupancy for the past 3 years. Terms: (1) Rate: 12 MAT + 2.70% (Floor: 2.70%, Cap: 8.96%); (2) LTV: 50%; (3) DCR: 2.1; (4) Term/Amort: 30/30; (5) Non-recourse; (6) Lender Fee: Par; (7) Prepayment: By year--3.0%, 2.8%; 1.6%, 0.4%, 0.2%, then open to prepay. Borrower may convert to fixed at then-prevailing rates; (8) Customization: In the event of non-monetary default where lender charges default interest rate, as long as borrower makes reasonable efforts to cure the default, lender will refund any default interest charged. This is the only time this lender has ever deviated from their standard default language in their loan documents. (Michael Schwartz)
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SPEAKER'S CORNER
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Gary E. Mozer will be on a Financing Panel at "The Secrets of Buying in a Sellers' Market", a conference by the International Real Estate Trade Organization at the Hollywood and Highland Complex (5th Floor Annex) on March 25th. Mr. Mozer’s panel is called: “Insider Secrets to the Best Financing and Structure.” For more information, visit www.ireto.org/vip/index.htm.
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