$53,000,000 (LIBOR + 1.25%) Cash Out Refinance

TRANSACTION OF THE WEEK!

$53,000,000 (LIBOR + 1.25%) Cash Out Refinance of Two Garden Apartment Complexes. These two well-located 250 and 140 unit apartment complexes in Southern California were built in the mid 1970s and mid 1960s respectively. Lender is a major commercial bank who has a limited pocket of funds available for quality, stabilized assets. The projects are always well-maintained, fully occupied and owner-managed by a very hands-on, high net worth, long-time owner. Loan amount represents approximately $135,000 per unit. Terms: (1) Pricing: 1 month LIBOR + 1.25%; (2) No Floor; (3) Term: 7 yrs; (4) Amort: Interest Only in yrs 1-2, 30 yr amort in yr 3, 25 yr amort in years 4-7; (5) LTV : 75%; (6) DCR: 1.25; (7) Full Recourse; (8) Lender Fee : ½ point; (9) Prepayment : Open to prepayment at any time without penalty. (Mike Gottlieb).

$17,000,000 Fixed-Rate, Non-Recourse Permanent Financing for a 124,935 Sq. Ft., GSA-Anchored, Multi-Tenant Office Building in Salinas, CA. GSP arranged permanent financing for the refinance of a 1970’s built, 124,935 sq. ft., GSA-anchored, multi-tenant office building located in Salinas, CA. Property has four spaces and is 98% occupied. Challenges to the transaction included structuring around the lease roll-over at the property and a rent provision in GSA lease whereby lower rent is collected in the event the tenant goes dark. Terms: (1) Rate: 10- Year Treasury + 1.15%; (2) Term: 10 yrs; (3) Amort: 30 yrs; (4) LTV : 80%; (5) DCR: 1.20; (7) Non-recourse; (8) Prepayment Penalty: Defeasance; (9) Lender Fee : Par. (Gary E. Mozer, Lee T. Norman, Mike Sullivan).

$4,050,000 Fixed Rate, 30 Year Amortized Refinance of an East Coast Lake Marina: Yes you read this correctly – 10 year fixed rate debt for this "floating" asset. This non-cash out refinance is collateralized by the operating lease involving two separate government entities: One County, one Federal that added to the normal challenges of obtaining an agreeable estoppel and SNDA. The lender bent over backwards in limiting their required language in order to facilitate the execution of the estoppel and SNDA. The Marina is on 62 acres of land with 126 covered slips and 603 open slips (729 total) and 18 docks. It is located on a Georgia lake that served as the rowing site for the 1996 Summer Olympics. Terms: (1) Pricing : 7.5% fixed; (2) Term: 30 yrs due in 10 yrs; (3) LTV: 75%; (4) DCR: 1.35; (5) Recourse ; (6) Warm body guaranteed; (7) Prepay : 5,5,4,4,3,2,1,0,0; (8) Lender Fee : 1 point. (David Stepanchak, Allison Higgins).

INTEREST RATE UPDATE

Fixed Rates: Big bond market rally on Friday as traders concentrated on the high unemployment rate and seemingly ignored the inflationary wage data in the same report…regardless the 10 year dropped to 4.89%....the 10 year SWAP narrowed to 57 (in from the low 60’s). Accordingly, many of our borrowers are rate locking if they are in position; others are trying to get there. Floating Rates: 30 day LIBOR dropped from 5.40% to 5.36%, Prime Rate remains stable as the Fed did not raise rates at today’s meeting, ending a two year, 17 consecutive raise streak. Now all eyes remain on the Fed as speculation begins: “Is this a break or a plateau? And if it’s a plateau, when will the rate cutting begin?” Stay tuned… (David R. Pascale, Jr.)