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| KEY RATE INDICES |
FANNIE MAE RATES * |
| Prime Rate |
7.75% |
| 3 Mo. T’s (YTM) |
4.76% |
| 6 Mo. T’s (YTM) |
4.94%
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| 5 Yr. U.S. T’s |
4.99% |
| 10 Yr. US T’s |
5.13% |
| 30 Yr. US T’s |
5.23% |
| 12-MAT |
4.01% |
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| LIBOR - 1 mo. |
5.04% |
| LIBOR - 3 mo. |
5.13% |
| LIBOR - 6 mo. |
5.22% |
| LIBOR - 1 yr. |
5.33% |
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| Tier 2++ (80% LTV) |
6.34% |
| Tier 3++ (65% LTV) |
6.20% |
| Tier 4++ (55% LTV) |
6.06% |
| 10 yr. term/30 yr. amort. |
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TRANSACTION OF THE WEEK!
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| $15,300,000 Acquisition Financing for Two Office Buildings in Charlotte, NC. GSP has arranged two loans totaling $15,300,000 for the acquisition of two adjacent early 1980’s vintage suburban office buildings that were purchased from one seller. Property Specs, (Bldg 1): 84,500 Sq. Ft., 4-stories, 95% occupied. (Bldg 2): 83,000 Sq. Ft., 4 stories, 40% occupied. GSP recommended a fixed rate loan on the stabilized property and a floating rate bridge loan on the other property until it stabilizes. We considered some financing proposals from a single lending source willing to make two separate loans, but in the end opted for two different lenders for better execution. Challenges/Issues: (1) We customized SNDA’s and estoppels that were acceptable to both lenders to make the process easier for the property management firm (which was being retained by the borrower); (2) Purchase price was allocated between the two properties to fit the lenders’ loan to cost and other underwriting constraints. Perm Loan Terms (Bldg 1): (1) Pricing: Swap + 0.65% (10 Yr T + 1.17%); (2) Loan Term: 10 yrs; (3) Amort: 30 yrs; (4) DCR: 1.25; (5) LTV: 75%; Lender Fee: Par. Bridge Loan Terms (Bldg 2): (1) Pricing: LIBOR + 3.75%; (2) Loan Term: 36 mos; (3) Amort: Interest Only; (3) DCR: 1.20; (4) Extensions: 2 x 1 yr; (5) Non-Recourse; (6) Lender Fees: 1%, (0.5% Exit Fee). (Michael Schwartz) |
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$6,590,000 Fixed Rate, Non-Recourse Financing for 15,486 Sq. Ft., 24-Unit Student Apartment Building Adjacent to University of Southern California. GSP arranged $6,590,000 in fixed-rate permanent debt on a recently renovated student apartment building adjacent to USC’s main campus. The client acquired the property in October, 2005 in an all-cash transaction and began an extensive repositioning of the asset including: all new plumbing, electrical, roofing, and heating/air conditioning systems; installation of high-speed internet access and Dish Network TV service; addition of a BBQ patio area; exterior renovation; and new bathroom and kitchen equipment. Due to the client’s established track record and 100% pre-leasing of the subject property, the lender funded despite the lack of an operating history on this project. All leases begin paying rent August 1, 2006. Terms: (1) Pricing: 10 Yr T + 1.10%; (2) LTV: 80%; (3) DCR: 1.20; (4) Loan Term: 10 yrs; (5) Amort: 6 yrs interest only, then 30 yrs; (6) Non-recourse; (7) Lender Fee: Par. (Gary M. Tenzer, Aaron Wright)
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$5,200,000 Bridge Loan (80% LTC) at LIBOR + 2.00% on a SavOn-Anchored Community Shopping Center in Santa Fe, NM. GSP arranged $5,200,000 of bridge financing to facilitate the acquisition & reposition of a SavOn-anchored community shopping center in Santa Fe, NM. Terms: (1) Rate: 30 Day LIBOR + 2.00%; (2) Loan Term: 24 months; (3) LTC: 80%; (4) Fees: 1% Lender Origination Fee and 1% Lender Exit Fee; (5) Prepayment: Lock-out for first 12 months, then open; (6) Recourse: Top 20%. (Gary E. Mozer, Lee T. Norman, Mike Sullivan)
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$3,000,000 Fixed Rate, Non-Recourse Permanent Financing for 35,032 Sq. Ft. Office Building in Sandy, UT. GSP arranged permanent financing for the acquisition of a three-story, 35,032 Sq. Ft. office building built in 1998 and located in Sandy, UT. The acquisition is 84% occupied by four tenants. The release of all funds was contingent upon the renewing of the previous owner's lease of 48% of the space. Terms: (1) Rate: 10 Yr T + 1.35%; (2) Term: 10 yrs; (3) Amort: 30 yrs; (4) LTV: 75%; (5) Non-Recourse; (6) Prepayment Penalty: Defeasance; (7) DCR: 1.20; (8) Lender Fee: Par. (Larry Wilemon, David Bierman)
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$2,260,000 Permanent Financing for 20,000 Sq. Ft. Owner-User Property. GSP arranged refinancing for a single-tenant industrial/warehouse property located in the Los Angeles area. The building is currently owned and occupied by a family company who has been in business for over 50 years. Challenges: (1) The owner-user has operated at a loss for the last two years; (2) Their contract rent is under market; (3) There was an environmental issue that needed explaining. Terms: (1) Rate: Prime – 0.25% fixed for 2 yrs, then Prime + 0.25% floating with option to re-convert to fixed at Federal Home Loan Bank of Seattle + 3.00%; (2) Term: 25 yrs; (3) Amort: 25 yrs; (4) LTV: 60%; (5) Prepayment: 5% for first 5 yrs, then 4%, 3%, 2%, and 1%. Borrower may prepay up to 20% of balance in any given year without penalty; (6) Lender Fee: Par; (7) Impounds: None. (Henry Bryan, Chad Coluccio)
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HOT MONEY
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Nationwide Healthcare Lender Providing Equity and High Yield Debt in Healthcare and Senior Housing Markets. Working with operating partners, lender has complete flexibility in structuring its investments to meet the needs of the opportunity and the management team. Lender finances property types “throughout the continuum of care” with an emphasis on the following: (1) Congregate Care; (2) Independent Living with Assisted Living and/or Alzheimer’s care; (3) Stand-alone Assisted Living (or with Alzheimer’s care). No stand alone Alzheimer’s; (4) Skilled nursing and other rehabilitation-type product on a portfolio basis; (5) Hospital Sale-Leasebacks (6) Medical Office Buildings. Highlights: (1) Deal Size: $5,000,000 - $250,000,000; (2) Rate: Spreads vary based on product type and leverage; (3) Loan Term: Up to 10 yrs; (4) Amort: 25-30 yrs; (5) LTV: 80%; (6) LTC: 85%; (7) Property Types: Senior Housing, Congregate Care, Assisted Living, Skilled Nursing Facility, Alzheimer’s Care, Medical Office; (8) Geography: Nationwide.
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SPEAKERS CORNER
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GSP Vice President Shlomi Ronen will be addressing condominium conversion financing at the CB Richard Ellis panel discussion titled Condo Conversion: Maximize the Value of your Asset, Expand your Knowledge on May 3 at the Regency Club in Westwood, CA. The panel will present information on mapping, entitlement, budgeting, sale-outs, financing, and more.
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WE’RE MOVING
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GEORGE SMITH PARTNERS, INC.
is pleased to announce the relocation of its office:
Effective May 15, 2006
George Smith Partners, Inc.
10250 Constellation Blvd., Ste. 2700
Los Angeles, CA 90067
Phone: (310) 557-8336 - Fax: (310) 557-1276
www.gspartners.com
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