Lender Funding High Leverage (up to 95%) - FINfacts

KEY RATE INDICES

FANNIE MAE RATES *

Prime Rate	6.75%
CODI*	1.693%
3 Mo. T’s (YTM)	3.90%
6 Mo. T’s (YTM)	4.21%

5 Yr. U.S. T’s	4.45%
10 Yr. US T’s	4.58%
30 Yr. US T’s	4.78%
12-MAT	3.163%

LIBOR - 1 mo.	4.08%
LIBOR - 3 mo.	4.24%
LIBOR - 6 mo.	4.44%
LIBOR - 1 yr.	4.67%

Tier 2++ (80% LTV)	5.82%
Tier 3++ (65% LTV)	5.68%
Tier 4++ (55% LTV)	5.54%
10 yr. term/30 yr. amort.

TRANSACTION OF THE WEEK

$21,450,000 (90% LTC) Bridge Financing for a 435,000 S.F. Regional Retail Center in South Carolina: GSP was engaged to secure high-leverage, non-recourse, bridge financing for the acquisition of a regional shopping center in South Carolina. The property contains three anchors (two of which are over 80,000 s.f. each), a 12 screen movie theater, several in-line tenants and over 20 temporary tenants in kiosks. The loan involved significant structuring to help the borrower present three different redevelopment scenarios as well as obtain joint venture equity financing. GSP added value throughout the transaction including: negotiating the purchase and sale agreement, negotiating loan terms and documents, helping secure an equity investor, obtaining property insurance, etc. Terms: (1) Pricing: Libor + 400; (2) Term/Amort: 3 years plus 1-6 month extension, I/O; (3) LTV: 90%; (4) DCR: 1.20; (5) Prepayment: None; (6) Non-Recourse; (7) Lender Fee: 1.5 in, 1 out, .50 for the extension. (Steve Bram, Farzin Emrani).

$12,000,000 Permanent Financing for an 85,000 S.F., Ethnic Grocer-Anchored Property: GSP arranged $12,000,000 of acquisition financing of this 27 tenant, 1998 built, shopping center in Sugar Land (Houston), TX. Challenges to the transaction: (1) Anchor tenant grocer with sales below $200/s.f., and (2) Submarket vacancy meaningfully higher than property actual vacancy (3% actual vacancy). No tax or insurance reserves escrowed. Terms: (1) Pricing: 10-Year T + 1.12%; (2) Term/Amort: 10/30; (3) LTV: 77%; (4) Prepayment: Defeasance; (5) Non-recourse; (6) Lender Fee: Par. (Larry Wilemon, Mike Sullivan)

$6,300,000 Bridge/Construction Loan for a To-Be-Completed Retail Center on a Major Los Angeles Freeway: GSP arranged non-recourse 18-month bridge/construction financing for the expansion of this “pad” oriented retail center. The property is extremely well located adjacent to an off-ramp to a major freeway and features freeway visible signage. It also sits directly in front of two office buildings, each occupying in excess of 650 employees and serving on average 600 visitors a day. The center currently has three national tenants, including one of the first drive-thru Starbucks which has exceeded monthly sales expectations. The center is perfectly positioned for five additional national tenants. This financing provides funds to: (1) Take-out the current bridge lender and (2) Complete leasing and construction of five pads and buildings. A small debt service reserve was funded as in place cash flow in place is not sufficient to cover the debt service without additional leasing. Our client needed a quick close which was a key factor in picking the lender. The deal progressed very smoothly and closed in about 45 days. Terms: (1) Pricing: Prime + 0.50%; (2) Term: 18 months with three, 3 month extensions, Interest Only; (3) Loan to Cost: 60%; (4) DCR: 1.40 based on proforma cash flow; (5) Non-Recourse; (6) Lender Fee: 0.75%, 0.25% per extension. (David Stepanchak, Allison Higgins)

$5,875,000 Land Loan Closed in 3 Weeks with Commercial Bank: GSP arranged quick “non-hard money” financing for this 320 acre parcel of raw land in Bullhead City, AZ. The loan closed the day of the contract and there was no extension possible. The site contains 256 acres of land for single family residential tract development (over 1,500 lots). A commercial bank provided the timely financing at the following Terms: (1) Rate: Prime + 2.0%; (2) LTC: 55%; (3) Loan Term: 1 year with 2 x 6 month options; (4) Amort: Interest only; (5) Recourse. (Steve Bram, David R Pascale, Jr., Shlomi Ronen)

$1,950,000 Permanent Loan for Single-Tenant (Non-Credit) Flex Industrial Property in Salt Lake City, Utah: Tenant has weak operating statements and weak balance sheet. The 80,000 s.f. mid-90’s constructed property was purchased from the tenant after the tenant exercised a below-market purchase option in its lease agreement. Terms: (1) Loan Amount: $1,950,000; (2) Pricing: 10 year T + 1.55%; (3) LTV: 60%; (4) DCR: 1.40; (5) Loan Term: 10 Years; (6) Amort: 25 Years; (7) Non- recourse; (8) Lender Fee: Par; (9) No Capital Expenditure or Tenant Improvement reserves. (Larry Wilemon, David Bierman).

HOT MONEY

Lender Funding High Leverage (up to 95%) Structured First Mortgages for Transitional Opportunities. This lender is funding non-participating very high leverage transactions and can close in 30 days. Program Highlights: (1) Property Types: Apartments, Industrial, Hotels, Office, Retail Mixed-Use, Entitled Land and Parking Structures; (2) Geographic Location: California and Western States; (3) Loan Size: $10,000,000-$30,000,000; (4) Amort: Interest only; (5) LTC: up to 95%; (6) Origination Fees: 1-2%; (7) Recourse: Considered on a case by case basis; (8) Rates: Starting at 12%; (9) Prepayment: No prepayment penalty, although lender requires a minimum return negotiated at application.

RATES, TRENDS, ETC.

Fixed: The 10 year Treasury yield spiked dramatically to 4.60% this week – was it inflation fears? Doubts about Greenspan’s successor? Swap rates climbed also, the 10 year Swap hit 49.75 (it has hovered in the low to mid 40’s for several months). CMBS AAA bonds held their spread over Swaps, but CMBS originators indicate that break even spreads have widened. Floating: LIBOR rates have risen over 2.00% this year, Prime rate has risen 2.50%. The big question is, will cap rates rise? Also, will inflation pressures lead to higher rents and/or operating expenses? Where will margins and returns be for investors next year…..Stay tuned….. (David R. Pascale, Jr.)

GSP WELCOMES

GSP Profiles – Thomas Falbo: (Part of our continuing series profiling GSP's "Next Generation" of Brokers.) Mr. Falbo joined GSP full-time in July 2005. Prior to GSP, he worked as a film publicist for a small firm helmed by Hollywood publicist and actor Mickey Cottrell. He received a Bachelor Degree in Political Science in 2004 from Villanova University. While at GSP, he has worked on placing and closing over $30,000,000 in financing.

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