GSP/Rifkind Knocks Down $60,000,000 - FINfacts

KEY RATE INDICES

FANNIE MAE RATES *

Prime Rate	4.00%
11th District	1.902%
3 Mo. T’s (YTM)	0.91%
6 Mo. T’s (YTM)	0.98%

5 Yr. U.S. T’s	3.05%
10 Yr. US T’s	4.03%
30 Yr. US T’s	4.91%
12-MAT	1.234%

LIBOR - 1 mo.	1.10%
LIBOR - 3 mo.	1.13%
LIBOR - 6 mo.	1.21%
LIBOR - 1 yr.	1.45%

Tier 2+ (80% LTV)	5.42%
Tier 3+ (65% LTV)	5.24%
Tier 4+ (55% LTV)	5.04%
10 yr. term/30 yr. amort.

TRANSACTIONS OF THE WEEK!

$47,800,000 ($97,155 Per Unit) Construction Loan for a 492 Unit Apartment Community in the Inland Empire of Southern California: History of the deal: In late 2002, GSP placed an Acquisition & Development loan with this lender for $8,700,000. One of the conditions of the A&D loan was that the lender had the right to provide the vertical construction financing when the developer was ready, but the vertical construction loan had to be competitively priced with what other banks would quote on the same loan. The A&D loan was Prime + 1% with a 5.75% floor. Since late 2002 when the A&D loan recorded, the market for similar construction loans had changed and GSP assisted the developer and lender in surveying the market for similar loans from other institutions. As a result, the construction loan had the following terms which had previously never been offered by this bank. Terms: (1) Rate: LIBOR + 2.75% with a 4.00% floor rate; (2) Term: 3 years with two 6 month extensions; (3) Amort: Interest only; (4) LTV: 75%; (5) LTC: 90%; (6) Lender Fee: 0.75% plus 0.25% for each 6 month extension; (7) Recourse. (Gene Brunkhardt)

$16,000,000 Bridge Loan on Newly Constructed, but Vacant 150,000 sf Class “A” Office Building: GSP has secured bridge financing which allowed our borrower to take out a construction loan that had matured. Initial funding was $9,000,000, with a $5,000,000 reserve for Tenant Improvements and Leasing Commissions, and a $2,000,000 reserve for 2 years of interest payments and carrying costs. Borrower’s goal was achieved because they will not have to come “out of pocket” during the lease up period. Obtaining the loan was challenging, but concerns were overcome by the following: (1) Borrower has $8,000,000 cash equity in the transaction; (2) strong borrowing entity with partial personal guarantees; (3) tight office submarket and good leasing prospects with a credit tenant; (4) existing relationship with the borrower; (5) borrower has strong operating experience in this submarket; (6) total cost approximately $24,000,000 with the shell completed in excellent condition. Lender underwriting factored in market rents, market tenant improvements, and a conservative downtime estimate of two years. Terms: (1) Rate: 6 month LIBOR + 3.75%, 7% floor; (2) Term: 2 years; (3) Amort: Interest only; (4) Fully funded interest reserve; (5) Loan to Stabilized Value: 75%; (6) Recourse: Top 40% Recourse to principals; (7) No prepayment penalty; (8) Lender Fee: 1.00%. (Mike Gottlieb)

$14,400,000 (80% LTV) Fixed Rate Financing for Lifestyle/Entertainment Center in Tertiary Market: Subject property is a 101,374 s.f. outdoor center in Pacific Northwest. Construction was completed in 2001, and the center enjoys a spectacular riverfront location. Due to planning and zoning restrictions, the project is the last retail project to be developed on the waterfront in the region. The property has over 25 tenants, most of which are not investment grade rated. GSP arranged financing to replace the existing construction loan. Issues that were overcome in the transaction included: (1) vacancy level of 21.6% at the property, despite two years of operating history; (2) two national tenants with sales that were equal to or below the levels that allowed for lease termination during their “kick out” periods; (3) underwriting a cinema shadow-anchored center; (4) several local tenants that were either receiving rent concessions or that had leases expiring in 2004; and (5) tertiary market location, with no truly comparable properties to this new development within the region. Financing: (1) Pricing: 10-Year T + 1.60%; (2) Term/Amort: 10/30; (3) LTV: 80%; (4) DCR: 1.25; (5) Prepayment: Yield maintenance; (6) Non-recourse; (7) Lender Fee: Par. (Gary Mozer, Lee Norman, Larry Wilemon).

HOT MONEY!

Private lender has asked George Smith Partners to originate up to $50 million of junior, bridge and mezzanine loans on income-producing property including apartments, retail, mobile home parks, industrial property and parking garages and lots. Deal size- $1 million to $10 million per transaction. California and Nevada focus. Up to 90% loan-to-cost and up to three year term. Interest rates of 9-12% with two point commitment fee to lender with third party costs borne by borrower. Reasonable exit fee can be structured in lieu of yield maintenance. Only 1.0 combined debt service coverage required. Rapid underwriting and funding. Lender has track record of very creative financing solutions. For more details, contact Gary Mozer at 310-557-8336 x110.

GSP/Rifkind Knocks Down $60,000,000 in Private Investor Placed Loans in Six Weeks!

Here is a thumbnail description of some of these transactions:

$33,000,000 Blockbuster Land Loan: GSP/Rifkind arranged a $33,000,000 land loan to enable the sponsor to take out his billionaire investment partner to become the 100% owner of Ranch Las Flores (RLF): RLF is a fully approved city that will encompass over 16,000 residential lots. Located just 15 minutes from the expanded Ontario Airport and Interstate 15, RLF is the next major housing development to break open in the fastest growing county in the USA. At final build-out, the project’s sales will exceed $1.5 Billion. RLF begins mass grading in approximately 12 months. Along with the equity replacement component to our financing, we structured a $4,000,000 line to pay for the balance of the predevelopment costs. Terms: 12%, 3 Years, Interest only. Interest is paid only on the money drawn. Funding time TWO WEEKS (This is huge land folks!) (David Rifkind, Gary M. Tenzer, George Smith, Jim Neuman)

$6,000,000 1st T.D. Extreme Special Purpose Building: GSP/Rifkind plays the odds with a new First TD on Larry Flynt’s Hustler Casino in Gardena, CA. Majestic/LFP, the holding company for many of the famous publisher’s companies, had a complex debt structure that tied up many of its assets in a single loan. To complicate matters, the institution that originated this spider’s web of cross collateralized assets went broke. This created an opportunity. GSP/R arranged a new first TD on the Casino property which, in conjunction with a new corporate finance restructure, unraveled the cross collateralization and freed up assets for more flexibility. The challenge to this loan was the extreme special purpose nature of the property. It is highly improved for a card club and entertainment venue. Further, the California Gaming Commission must approve all financing transactions and they place a restriction of attaching FFE on any assets that are considered elements of a gaming operation. We found a unique way to structure around the challenges with the flexibility afforded to us by our private placement investors. (David Rifkind)

$3,790,000 1st T.D. Metal Industrial Buildings: GSP/Rifkind arranged “quick close” loans on 2 large industrial facilities that are comprised of over 200,000 s.f. of metal buildings. One is located in Pomona, CA and the other is located in Otay Mesa, San Diego, CA. The Pomona facility is a manufacturing company that has suffered losses over the past several years. The bank that carried its A/R and equipment lines called the loans due to degraded credit quality. We arranged a loan only on the real estate that was sufficient to payoff the lines and the borrower arranged, in conjunction with our financing, a new A/R facility. We believe this new recapitalization will see the company through to profitability in short order. (David Rifkind)

$1,650,000 2nd T.D. Car Dealerships: GSP/Rifkind structured a “quick close” loan on a car dealership that encompassed two city blocks in Downtown Oakland, CA. The problem: The owner had an existing low interest first TD from Ford. He had a second TD from the City of Oakland. He decided to sell the dealerships to a group who were going to operate them outside of the City of Oakland and he sold the land to a developer for re-development. Our client wished to close the sale of the franchise dealerships prior to the sale of the fee land. The city required the owner to payoff its loan if the franchises were sold or relocated. We provided a 2nd TD behind a very low interest First TD. The combined LTV was below 45% of the contract sales price of the land which allowed us to give the borrower the benefit of the blended rate. This loan closed in 8 days from start to finish! (David Rifkind, Shlomi Ronen, Steve Bram)