Fixed Rate Construction/Permanent One Stop Shop

TRANSACTION OF THE WEEK!

$22,675,000 Permanent Financing (5 years interest only) for a 200-Unit Multifamily Property in Murrieta, CA. GSP has arranged permanent financing for the acquisition of a 200-unit multifamily property located in Murrieta, CA. The sponsor plans to implement a comprehensive reposition strategy which includes increasing rents to market, renovating units, adding washers/dryers to units and building a fence with a guard gate around the subject property. While this strategy has “bridge qualities” the asset currently generates cash flow and GSP was able to secure fixed rate conduit financing with five years interest only, open to prepayment at par after year three. Terms: (1) Rate: 5 Yr Swap + 1.17%; all in rate of 6.84%; (2) Loan Term: 5 yrs; (3) Amort: Interest Only; (4) LTV: 75%; (5) DCR : 1.09; (6) Non-Recourse; (7) Prepayment Penalty: Locked out until securitization, defeasance thereafter; open at par during last 2 years of the loan term; (8) Lender Fee: 0.50%. (Steve Bram, Noah Hahn, Steven Yazdani).

$5,600,000 Fixed Rate, Non-Recourse Permanent Financing for 40,401 Sq. Ft. Office Building in Camarillo, CA. GSP arranged permanent financing for the refinance of a 40,401 Sq. Ft. office building located in Camarillo, CA. Lender made concessions on several fronts including allowing for a single-tier borrower entity and limiting legal costs on the transaction. Terms: (1) Rate: Treasuries + 1.05%; (2) Term: 10 yrs; (3) Amort : 3 yrs Interest Only; (4) LTV: 75%; (5) Non-Recourse; (6) Prepayment Penalty: Defeasance; (7) Lender Fee: Par. (Gary E. Mozer, Lee T. Norman, Mike Sullivan).

$5,400,000 Construction Takeout Loan (113% of Total Project Cost) for a 22,740 Sq. Ft. High-Image Street Frontage Oriented Retail Center in Las Vegas. Property was built in 2005. Tenants include La Lupita Market, Taco Time, Marcos Pizza, Wings Restaurant, Starbucks, Washington Mutual, and Papageorgios Tobacco. Challenges: The borrower wanted to close this permanent loan prior to construction completion of the shopping center. Solutions: (1) Lender funded the loan upon Certificates of Occupancy for the majority of the shopping center but allowed two end-cap tenant spaces to complete construction within the first 6 months after loan closing, (2) The loan is recourse until Certificates of Occupancy and a 1.20 DCR on cash flow is in place. Terms: (1) Rate: 10 Yr T + 1.05%; (2) Term: 10 yrs; (3) Amort: 30 yrs; (4) LTV: 75%; (5) LTC: 113%; (6) DCR: 1.30; (7) Non-Recourse upon achievement of property level milestones; (8) Prepayment Penalty: Defeasance; (9) Lender Fee: Par. (Michael Schwartz, Kevin Holliday)

HOT MONEY

Fixed Rate Construction/Permanent “One Stop Shop” Financing One Fixed Rate Loan for Construction and Permanent Financing. One set of loan docs. Lender fixes rate for entire term at beginning of construction. Lender can offer unusual term and amort schedule, like 12 year term/30 year amort for a property that takes two years to build. Loan is recourse during construction, then non-recourse for remainder of term. Pricing premium of approximately 20-30 bps over standard permanent pricing depending on draw schedule. Program Highlights: (1) Deal Size: $10,000,000 - $100,000,000; (2) Rate: Corresponding Treasury + 1.00% - 1.50%; Loan Term: 5-30 yrs; (4) Amort: Up to 30 yrs, Interest Only up to 3 yrs; (5) Max LTV: 75%; (6) Max LTC: 85%; (7) Min DCR: 1.15 (underwritten using 25 yr amort schedule); (9) Property Types: Apartment, Retail, Office, Industrial, Mobile Home Park, Self-Storage; (10) Prepayment: Minimum 3 yr lockout, then yield maintenance, last 90 days open at par. Structured prepay available; (11) Fees: 1%; (12) Geography: Nationwide.

LEADERSHIP INITIATIVES MOTIVATE MANAGEMENT RESTRUCTURING
AT GEORGE SMITH PARTNER

George Smith Partners announced last week that the firm has restructured its management to support demands created by continued growth, and leadership initiatives to expand Client Services.

Gary Mozer and David Rifkind, both long-time principals, have been elected by the firm’s shareholders to be Co-Managing Directors. Rifkind is overseeing operations and leading policy and strategy, while Mozer is leading the firm’s program of “Peerless Excellence” in production and client services. Steve Bram and Gary M. Tenzer, principals with the firm since its inception, have been named Senior Directors.

Following a nationwide search for an experienced finance and administration leader, the firm has hired Todd August as its Chief Operating Officer. He was formerly the COO of the Department of Economics at The University of California, Los Angeles.

Last month, the firm relocated to new, larger headquarter offices in the MGM Tower in Century City, at 10250 Constellation Blvd., Suite 2700, Los Angeles, Calif., 90067.