KEY RATE INDICES FANNIE MAE RATES * Prime Rate 6.25% CODI* 1.693% 3 Mo. T’s (YTM) 3.40% 6 Mo. T’s (YTM) 3.67% 5 Yr. U.S. T’s 4.12% 10 Yr. US T’s 4.28% 30 Yr. US T’s 4.47% 12-MAT 2.737% LIBOR - 1 mo. 3.52% LIBOR - 3 mo. 3.70% LIBOR - 6 mo. 3.92% LIBOR - 1 yr. 4.16% Tier 2+ (80% LTV) 5.48% Tier 3+ (65% LTV) 5.34% Tier 4+ (55% LTV) 5.20% 10 yr. term/30 yr. amort. TRANSACTION OF THE WEEK $62,000,000 (80% LTV) Fixed Rate Financing for Regional Destination Center: Collateral consisted of 225,000 square feet of newly constructed retail space, part of a larger regional destination center in Southern California. GSP was engaged to obtain take-out financing for the existing construction loan. The transaction was structured to accommodate physical occupancy at closing of less than 85%. The loan request was also adjusted (upward) at final pricing to achieve the targeted DCR as a result of Treasury compression. Financing: (1) Pricing: 10-Year Swap + 0.57%; (2) Term/Amort: 10/30, 3 years I/O; (3) LTV: 80%; (4) DCR: 1.20; (5) Prepayment: Yield Maintenance; (6) Non-Recourse; (7) Lender Fee: Par. (Gary Mozer, Lee Norman, Larry Wilemon). $4,000,000 New Permanent Loan with Cash out For San Fernando Valley Office Building. This was the third loan for this client with the same lender in the last six months. This financing was for a 15,900 sf two-story office building completed in mid-2003 with a ‘BB’ rated medical/kidney dialysis group occupying 63% of the building with a new 10-year lease. Included in the lease was a reimbursement for TI’s, which this lender allowed to be included in the underwriting as additional rent. An EIR problem developed just prior to closing. The site previously had underground fuel tanks and although all tanks were removed and remediation was completed and fully documented in 1987, the LA City Fire Department did not issue a ‘no further action’ and ‘closure’ letter, a practice not started until a later date. After discussions with the fire department and several discussions with all parties involved a revised EIR report was issued that was satisfactory to the lender. (1) Fixed Rate: 5.89% for the first 3 years; floating thereafter with annual adjustments indexed to the 3 year CMT + 2.50% ; (2) Term: 10 years; (3) Amortization: 30 years; (4) LTV: 70%; (5) Recourse; (6) No prepayment penalty; (7) No impounds and no reserves; (8) DCR: 1.25; (9) Lender Fee: 1.0%. (Gene Brunkhardt) $400,000 Quick Close Residential Second Mortgage The combined LTV including the second mortgage is 73%. This was a “problem solving” transaction. The borrower, a farmer in the Antelope Valley, declared Chapter 11 bankruptcy in 2002. The bankruptcy was the result of fraudulent behavior by his farm employees, which did not come to light until a forensic audit was performed the next year. Furthermore, his farming business cash flow ebbed during 2003 and 2004 and did support a typical residential or farm refinance. Existing farm lender filed notice of default in early 2005 and is in the process of a workout. The proceeds of this financing have brought the borrower current with the existing farm lender. Terms: (1) Rate: 12%; (2) Loan Term: 5 years, 1 month; (3) Amortization: Interest only; (4) Recourse; (5) Prepayable at any time. (Michael Schwartz) HOT MONEY National Bridge Program Providing High Leverage Portfolio Financing: Two portfolio lenders have collaborated to create a combined senior and mezzanine loan program, providing up to 90% LTV. Program Highlights: (1) Loan Size: $5,000,000-$50,000,000; (2) Geographic Area: Nationwide; (3) Pricing: fixed and floating. Senior and Mezz tranches are blended to a fixed rate spread, typically 10-15 bps above CMBS; (4) LTV: Up to 90%; (5) Ability to lock the interest rate at application on both the senior loan and mezzanine loan and to hold this interest rate for up to six months with no forward pricing premium ; (6) Portfolio lending: Easy docs and lender retains the servicing. PRESS BOX This week, Gary M. Tenzer was interviewed about Structured Finance for Multi Housing News. Noah Hahn also was interviewed this week regarding condominium financing in Las Vegas for Community Property News. Look for links to these articles in the upcoming FinFax. SPEAKERS CORNER GSP President Steve Bram will be a panelist at The Richard S. Ziman Center for Real Estate at the UCLA Anderson School of Management’s Residential Real Estate Conference to discuss whether or not there is a “Bubble” in the Southern California housing market. The conference is on Thursday, September 15, 2005, 7:30am to 1:30pm. 11th Annual GSP Real Estate Luncheon To Benefit the A-T Medical Research Foundation SAVE-THE-DATE!!!Wed., September 21, 2005Westin Century Plaza Hotel & Spa FEATURED GUEST SPEAKERBruce KaratzKB Homes Registration materials will be emailed early AugustMARK YOUR CALENDARS NOW!!! If you have received this e-mail in error, wish to change your e-mail address or want to be removed from our list, click here.
