2003 YEAR END SUMMARY

ANOTHER RECORD YEAR FOR GEORGE SMITH PARTNERS

$2,340,252,412 in 2003

30% increase over 2002

203 Transactions – With 75 Lending and Capital Sources
Over $11 Billion in Commercial Real Estate Financing Since 1997

George Smith: “11½ years and counting and it keeps getting better. Every year since we formed George Smith Partners in July 1992 our (1) Volume (2) Number of Closed Transactions and (3) Gross Revenues have increased.

“2003 saw construction for most income property categories decline and we morphed our business mix to reflect the dynamics of the capital markets. Interest rates at both the short and long end of the market remained at or near 40 pushing down purchase cap rates, especially for apartments and anchored retail. This was reflected in our production mix with $881 million in apartment loans (up 113%) leading the 23 property categories in which transactions were arranged. CMBS loans (both fixed and floating) again led the lender types with $670 million. Our FNMA originations grew by 150% to $250 million. Creative financing with our private lending sources grew by 50% to $131 million. A new area of business was the arranging of $36 million in unsecured lines of credit in conjunction with new banking relationships.”

“At no time in my nearly 36 years of arranging real estate financing have borrowers enjoyed the variety of financing alternatives or the competitive pricing and terms that are currently available. Our available capital sources continued to increase as new sources entered the market introducing a variety of debt and equity instruments filling competitive market niches. We funded transactions with 75 different capital sources in 2003.”

“Not a week goes by where we don’t have at least two financial institutions making breakfast or luncheon presentations to us. Because of our volume, pipeline, deal quality and market knowledge we are able to offer our clients the cutting edge of financing alternatives. Because of our collective longevity in the business we are able to access the most senior decision makers at the institutions we do business with. This enables us to structure rates and terms often not being quoted to the market. Our lender database enables us to identify which lenders are best able to competitively provide the financing structures that optimize our borrower’s needs.”

“Our production staff has grown to 7 partners, 16 originators and a total of 30 professionals working in a culture that rewards productivity and where producers can and will become owners.”

“It is axiomatic that an income property mortgage broker must be nimble and constantly abreast of the market. This lets us run competitive bids for certain types of transactions and, at the other extreme, customize financing structures and then find the proverbial needle in the haystack.”