Full Proceeds Permanent Financing for Hotels

TRANSACTION OF THE WEEK!

$30,300,000 Condo Conversion Refinance of a 265 Unit Project in Ventana Canyon, Tucson AZ. The property is very well located in exclusive Ventana Canyon, just below the Loews Hotel. Each unit enjoys excellent views of surrounding golf courses and mountains. The project is attractive because an average price point of $225,000 allowed buyers entry into a high barrier sub-market with average single family homes in excess of $750,000. Unique Characteristics: The conversion project was well under way at the time of the refinance with 30 units already sold at the time of closing. GSP was able to provide the client with additional term relative to the existing loan. Additionally, GSP was able to arrange for approximately $4,000,000 of cash out to the client. Terms: (1) Rate: Prime + 0.25%; (2) Term: 24 mos + two 6 mo extensions; (3) Amort: I/O; (3) LTV: 65%; (4) Recourse; (5) Loan Fee: 0.375%. (Noah Hahn, Steve Bram, David R. Pascale, Jr.)

$9,850,000 Non-Recourse Bridge Loan for a 1.05 Acre Oceanfront Lot Undergoing Entitlements for a Mixed Use Condo/Hotel Development in Long Beach, CA. GSP arranged short term financing for a to-be-built condo project comprising 53 condo units and 40 hotel rooms located on the sand in Long Beach. The site is currently improved with an operating motel that will be demolished when new construction begins. Loan proceeds were utilized to payoff a first trust deed and a second seller carry-back note, and included holdbacks for supplemental interest reserve. The bridge loan is expected to be repaid from either a new construction loan or a bulk sale of the entitled land. Terms: (1) Pricing: LIBOR + 4.75%; (2) Term: 12 mos; (3) Amort: Interest Only; (4) LTV: 85% of the “as is” appraised value; 60% of the appraised value “as entitled” for a residential condominium;(5) Non-recourse; (6) Lender Fee: 1.0%; (7) Extension Option: 6 months; (8) Extension Fee: 0.50%; (9) Exit Fee: 1%. (Andrew Levant, Gilda Rivera).

HOT MONEY

Full Proceeds Permanent Financing for Hotels (Full and Limited Service). In recent years, hotels have become hot again in the investment sales and lending markets and underwriting standards now conform more to other commercial properties. Properties considered include full service, extended stay, limited service (note that most exterior corridor assets are not eligible). Program Highlights: (1) Loan Size: $5,000,0000 and up; (2) Max LTV: Full Service/Extended Stay - 80%; Limited Service - 75%; (3) Amort: 30 yrs; (4) Min DSCR: 1.30; (5) Minimum Underwritten Management Fee: 4% (5) Pricing: competitive spreads in the 1.20-1.50 range based upon LTV and DCR; (6) Term 5, 7, 10 yrs; (7) Markets: primary, secondary and tertiary markets, with a minimum of 250,000 residents.

INTEREST RATE/CMBS UPDATE!

Bond Market Rally Continues, 10 Year T below 4.50%! Retail sales are strong this season and the core inflation indicator rose to an above-average 0.2% -- two signs of a “hot” potentially inflationary economy. Instead, bond traders focused on today’s increased jobless claims report and rallied on the information indicating a “cooling” economy. Fixed rate borrowers are locking in all-in rates in the 5.50% range. Meanwhile, floating rates are still frozen at relatively high levels. Also, forward borrowing rates are very attractive, fixed rate premiums are averaging approximately 0.5% per month. Stay tuned…… (David R. Pascale, Jr.)

GSP PROFILES
(Part of our continuing series profiling GSP's "Next Generation" of Brokers)

Anna Saucier, Associate: Ms. Saucier joined George Smith Partners in 2004 as Office Manager in our Alaska office. She is now an Associate, assisting the GSP Senior Council closing transactions. Ms. Saucier received her undergraduate degree from Franciscan University of Steubenville in 2001.

Brian Bergfield, Associate: Mr. Bergfield joined George Smith Partners in mid-2006 following stints as a Convertible Arbitrage Trader and Asset Manager in the investment banking industry. He earned his Bachelor of Science degree in Finance from Portland State University.