INTEREST RATE PROTECTION FOR HOME BUILDERS

$24,900,000 Cash Out Refinance for 140,000 Sq. Ft. Grocery Anchored Shopping Center in San Fernando Valley. Last year GSP arranged 90% of cost financing for the acquisition of this 1970’s built three building two story shopping center. This 35 tenant, 93% occupied, property is anchored by a 30,000 Sq. Ft. grocery store which was considering an expansion, but never moved forward. Our borrower increased cash flow by reducing expenses and collecting more CAMs. The new financing allowed the borrower to pay off existing bridge financing and return most of their original equity. The new loan includes: (1) $1,500,000 holdback to be earned upon further increase in NOI, (2) Release provisions for two parcels of land in the parking lot to be developed into a fast food pad and a condo building, and (3) Inclusion of income from a large number of month to month tenants. Loan Terms: (1) Rate: T + 1.30%; (2) Loan Term: 10 yrs; (3) Amort: 4 years interest only, then 30 yrs; (4) LTV: 83%; (5) (LTC ): 100%; (6) DCR: 1.20 on Interest Only Constant; (7) Non Recourse; (8) Fee: Par. (Steve Bram, David Pascale).

GSP CLOSES COAST-TO-COAST FINANCINGS

$11,800,000 Permanent Financing with Five Years Interest Only in Florida. GSP arranged financing for a 3-building, 121,000 Sq. Ft. office/warehouse in Fort Myers, Florida. The property was acquired in 2004 as a single industrial/office building with excess land. The borrower constructed two additional buildings, one on either side of the existing structure. The property was 94% occupied at closing. Terms : (1) Rate: 6.09%; (2) Pricing : T + 0.97%; (3) Term/ Amort: 10/30; (4) LTV: 80%; (4) DCR: 1.20; (6) Non-Recourse ; (7) Lender Fee: Par. (J.Jay Brooks).

$9,200,000 Acquisition of 160 Apartment Units in Alaska. GSP arranged financing for the acquisition of 160 units in three individual apartment complexes in a tertiary market in Alaska. The acquisition contract included an extra 9+ acres of land that was not part of the collateral. When the appraisal came in low the lender increased the LTV from 80% to 82% rather than drop proceeds. Considering the market value of the land in relation to the collateral value and acquisition price, the loan was actually made at over 100% LTV. GSP negotiated the ability to “buy” substitution of collateral, a second deed or step down pre-pay for a small increase in spread. Closing the transaction involved various hurdles due to the still-developing area north of Anchorage that is growing in population faster than its infrastructure, including non-standardized regulations for occupancy and inspections. Terms: (1) Rate: 10 Year T + 1.05%; (2) Term: 10 yrs; (3) Amort: 30 yrs; (4)LTV: 82%; (5) DCR: 1.25; (6) Non-Recourse; (7) Lender Fee: 0.25%. (J.Jay Brooks).

INTEREST RATE PROTECTION FOR HOME BUILDERS

HOT MONEY

Fixed Rate Portfolio Loans With Flexible Prepay. This program is perfect for borrowers looking for flexibility, easy process, and low closing costs. Loans are priced over the corresponding CMT with spreads slightly wider than CMBS. Program Highlights: (1) Loan Size: $500,000 to $20,000,000; (2) Pricing: 1.65 to 2.15% over corresponding CMT; (3) Loan Terms: 3, 5, 7 or 10 years fixed (then converts to floating over 12MAT); (4) Amort: 25 or 30 years; (4) Min DCR: 1.15; (5) Max LTV: 75%; (6) Prepayment: a. 10 year fixed rate loan: 3,2,2,2,1,1 then open to prepay; b. 7 year fixed rate loan: 3,3,2,2,1 then open; (7) Lender also funds self amortizing 15 or 30 year terms.

INTEREST RATE UPDATE

The 10 Year Treasury hit 5.25% last week and the consensus was that it was on its way to 5.50% (which has been predicted by many pundits for over a year). Then this week a mixed bag of factors, including weak job numbers, flight to quality due to international events, and a surprisingly lower US trade deficit, combined to rally it down to 5.10%. The 10 Year Swap rate is up to +60 (after hovering in the low 50’s for many months). All in loan rates range from 6.10% - 6.50%. All eyes are on the Fed for the August 6 meeting. The two most likely scenarios are that they (1) raise rates for the last time on this run up that began June 2004, or (2) not raise this time and imply that June 29 was the “end of this run.” Stay Tuned… David R. Pascale, Jr.

CONGRATULATIONS TO GSP’S STEVE ORCHARD!

Steve and his wife, Karrie, just welcomed a new addition to their family. Highlights: (1) Name: Katherine Rose Orchard; (2) Birthday: July 10, 2006; (3) Weight: 8lbs 12oz; (4) Length: 20.75in.