Permanent Financing For Single Tenant, Non-Investment Grade

TRANSACTION OF THE WEEK!

$25,000,000 Fixed Rate Financing for Luxury Hotel in Southern California: Subject property is a 209-room luxury hotel in Southern California. The hotel is unflagged, but operates in a very strong sub-market. Ownership has largely completed a total renovation and repositioning of the property in the last 24 months, and is just starting to realize the economic benefits. GSP arranged permanent financing for the recapitalization of the asset. The financing structure included no ongoing FF&E reserves and no lockbox for deposits. Terms: (1) Pricing : 10 Year T + 1.20%; (2) Term: 10 yrs; (3) Amort: 25 yrs; (4) Prepayment : Yield Maintenance; (5) Non-Recourse ; (6) Lender Fee: 0.10%. (Larry Wilemon, Gary Mozer, Mike Sullivan).

$8,410,000 (Three separate loans) for Three Single Tenant Industrial Properties in Orange County. GSP arranged Life Company financing for these three well located single tenant industrial properties. Each one is a corporate or regional headquarters featuring above average landscaping, class A or B office build-out, conference rooms, and private entryways. None of the tenants are investment grade (private or foreign companies). Lender waived all reserves and locked rate at application (Life Company lock: no margin calls), prepayment is yield maintenance. The Properties : Bldg 1: (1) Loan Amount: $3,660,000; (2) Built: 1998; (3) 49,000 Sq. Ft.; (4) 22% office build-out; (5) 2 dock high doors. Bldg 2 : (1) Loan Amount: $3,350,000; (2) Built: 1998; (3) 38,000 Sq. Ft.; (4) 45% office build-out; (5) 2 dock high doors. Bldg 3: (1) Loan Amount: $1,400,000; (2) Built 1998; 17,000 Sq. Ft.; (4) 20% office build-out. Terms: (1) Rate: T + 1.45%; (2) Term: 10 yrs; (3) Amort: 25 yrs; (4) LTV: 70%; (5) DCR: 1.40; (6) Non-recourse ; (7) Lender Fee: 0.50%. ( David R. Pascale, Jr., Steve Bram).

HOT MONEY

Permanent Financing For Single Tenant, Non- Investment Grade Properties. Nationwide lender evaluates tenant on a case-by-case basis by analyzing public or private financials. Flexible, structured financing tailored to meet the capital needs of small and middle market businesses in a wide range of industries, including Owner/User. Permanent loans for acquisition or refinance. Competitive pricing and no-fee forward commitments for 120-days (12-month forward rate- lock available). Construction loans in conjunction with permanent mortgages for business expansions. Sale- leasebacks to free up capital for business growth. Highlights: (1) Deal Size : $1,000,000-$50,000,000; (2) Rate : Corresponding Treasury + 1.5 0 %-3.75%; (3) Loan Term: 5-10 yrs; (4) Amort : 25 yrs; (5) Max LTV: 90%; (6) Min DCR: 1.10; (7) Non- Recourse; (8) Property Types: owner-occupied and single tenant commercial real estate; (9) Fees: par; (10) Geography : Nationwide.

INTEREST RATE UPDATE

Fixed Rate: Treasuries rallied to hover around 5.00% as economic reports and comments from the Fed Chairman have led to that famous question: “Is the Fed done raising rates?” The next round of reports (GDP this week and the monthly employment reports next week) will be closely scrutinized for signs of inflation. CMBS: The 10 year Swap fell below 60, down to 58.2 (narrowing about 3 bps), while AAA CMBS widened 1 bp, so spreads have remained steady. Floating Rate: 30 Day LIBOR was 1.29% two years ago when the Fed started raising rates, today it’s at 5.40%! Full leverage construction and bridge loans are being priced at 8.00% and more. With higher prices for lumber, steel and other materials, margins for developers are being squeezed. LIBOR has been tracking the Fed Funds/Prime rate, so the “hope” amongst developers and deal makers is that the Fed is indeed finished with this round of raises. Stay tuned… ( David R. Pascale, Jr.)

GSP BABY BOOM -- THREE BABIES IN FIVE DAYS!

Congratulations to GSP’s Michael Schwartz! Michael and his wife, Sandra, welcomed healthy twins to their family. Highlights: (1) Name: Max Edward Schwartz; (2) Birthday: July 16, 2006; (3) Time: 12:06pm; (4) Weight: 5lbs 6oz; (5) Length: 18 inches. Highlights: (1) Name: Karina Audrey Schwartz; (2) Birthday: July 16, 2006; (3) Time: 12:07 pm; (4) Weight: 6lbs 3oz; (5) Length: 18 inches.

Congratulations to GSP’s Noah Hahn! Noah and his wife, Sara, celebrate the birth of their daughter. Highlights : (1) Name: Paige Benjamin Hahn; (2) Birthday: July 20, 2006; (3) Time: 4:00 pm; (4) Weight: 7lbs 11oz; (5) Length : 22 inches.