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| KEY RATE INDICES |
FANNIE MAE RATES * |
| Prime Rate |
7.25% |
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| 3 Mo. T’s (YTM) |
3.99%
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| 6 Mo. T’s (YTM) |
4.30% |
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| 5 Yr. U.S. T’s |
4.37% |
| 10 Yr. US T’s |
4.43% |
| 30 Yr. US T’s |
4.61% |
| 12-MAT |
3.478% |
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| LIBOR - 1 mo. |
4.37% |
| LIBOR - 3 mo. |
4.50% |
| LIBOR - 6 mo. |
4.67% |
| LIBOR - 1 yr. |
4.83% |
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| Tier 2+ (80% LTV) |
5.69% |
| Tier 3+ (65% LTV) |
5.55% |
| Tier 4+ (55% LTV) |
5.41% |
| 10 yr. term/30 yr. amort. |
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TRANSACTION OF THE WEEK!
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| $35,640,000 Fixed Rate, Non-Recourse Financing for Portfolio of Student Apartments Adjacent to University of Southern California GSP arranged seven separate, non-cross collateralized 80% LTV CMBS loans, totaling over $35.6 million, on a portfolio of student apartments located in Los Angeles, adjacent to the USC campus. All seven transactions were processed and closed simultaneously, with identical loan terms, in less than 60 days. Taking full advantage of a favorable interest rate environment, GSP worked with the client to secure 10 year, fixed rate debt on nearly every property in the borrower’s portfolio. GSP was able to provide substantial cash-out and reduce the client’s overall debt service during the loans’ initial 6-year interest only period. The portfolio totals 201 units (551 beds) and 130,738 NRSF. All units have free Dish Network satellite television and multiple T3 internet connections. Amenities in certain properties include: courtyard areas, balcony units, gated underground parking, and secured intercom door entry system. Terms: (1) Pricing: 1.05% + 10 Year Treasury; (2) LTV: 80%; (3) DCR: 1.20; (4) Loan Term: 10 Years; (5) Amort: 6 years interest only, then 30 years; (6) Non-recourse; (7) Lender Fee: Par (Gary M. Tenzer, Aaron Wright) |
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| $19,500,000 Permanent Loan (90.00% of “Mark-To-Market” Value) Fixed at 7.97% for 10 Years, Non-Recourse. Property: Four-story, class A, 1997 built, 70,000 SF office building in Northern California’s San Francisco Peninsula. Challenges: The property is 97% leased (69% occupied) with massively (2x) over-market rents in place. Occupancy Details: 84% of the space is leased to two tenants rolling in-term. 40,000 SF leased to public non-credit tenant (occupying only 20,000 SF) at 1.7x market rents with lease expiring June 2012. 19,000 SF leased to public investment-grade tenant at 2.8x market rents with lease expiring January 2013. Terms: (1) Pricing: 10 Year T + 3.35%; (2) Loan term: 10 Years; (3) Amort: $2,500,000 amortized over 9 years to achieve $17,000,000 balloon at maturity. Pay-downs customized annually to release sufficient funds to cover phantom income tax; (4) LTV/LTC: 77% of purchase price, 90% of “mark-to-market” value; (5) Non-recourse; (6) Prepayment: 3 year lock-out, defeasance thereafter; (7) Replacement Reserves: $0.20 /SF; (8) TI/LC Reserves: 100% of net cash flow after income tax payments, capped at $1.5m; (9) Secondary Financing: Allowed up to 85% LTV and 1.15 DCR on aggregate debt service and actual income. (Gary E. Mozer, Lee T. Norman, Steven C. Orchard, Gil Barkon) |
| $2,240,000 (10-Year CMBS) Acquisition of Apartment Building in Southeastern Tertiary Market: GSP placed 80% of acquisition non-recourse debt for this out-of-state apartment property located in Georgia. When the client placed this property under application in July, they were required to obtain HUD approval in order to own and operate the property as it is 100% Section 8 property. The borrower was able to lock in a very favorable rate while HUD took 6 months to approve the new ownership. Terms: (1) Pricing: T + 0.96%; (2) Term/Amort: 10/30; (3) LTV: 80%; (4) DCR: 1.20; (5) Non-Recourse; (6) Lender Fee: Par; (7) Pre-payment: Defeasance. (George Smith, David Stepanchak, Allison Higgins) |
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HOT MONEY !
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High leverage, interest only, non-recourse financing for the acquisition of retail, office, industrial, and multifamily properties throughout the United States. Investment grade single tenant properties as well as A quality multifamily properties will be considered for 5, 7, or 10 year terms with up to 10 years structured as interest only. Program Highlights: (1) 80% of acquisition price (85% of acquisition price considered on drugstore portfolio's and deals over $15M); (2) 5, 7 or 10 year loan terms, no amortization (interest only payments for the entire term if requested); (3) Minimum 1.20x debt service coverage based on the interest only payment; (4) No Cap Ex or TI/LC reserves typically required (reviewed on a case by case basis).
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SEASONS GREETINGS!
We at George Smith Partners wish you and yours a Happy Holiday Season and great success in 2006!
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