GSPartners
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Volume XV | No. 2 | January 24, 2007
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KEY RATE INDICES
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Prime Rate
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8.25%
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1 Month LIBOR
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5.32%
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5 Yr US Treasury
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4.80%
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5 Yr Swaps
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5.22%
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12-MAT
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4.93%
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3 Month LIBOR
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5.36%
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10 Yr US Treasury
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4.81%
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10 Yr Swaps
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5.30%
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11th District COFI
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4.36%
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6 Month LIBOR
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5.39%
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30 Yr US Treasury
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4.90%
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| | | Transaction Description: | | $36,650,000 Fixed Rate, Bridge Financing for Multifamily Asset in Arrowhead Arizona. $36,650,000 Fixed Rate, Bridge Financing for Multifamily Asset in Arrowhead Arizona. GSP arranged financing for the refinance of a 50% occupied, 360 unit, class A multifamily apartment building in the Arrowhead submarket of Phoenix. The borrower purchased the property 12 months ago with the intention of converting it to condominiums. Prior to selling units, and understanding the changing dynamics of the marketplace, the borrower decided to operate the building in a for-lease capacity. The for-lease dynamics in the immediate marketplace were very strong, as was the quality of the asset, which allowed GSP to structure a fixed rate bridge transaction. GSP structured an interest reserve and capital improvements into the loan to allow for the lease up to stabilization. GSP was able to achieve proceeds at 90% Loan to “as is” value and 80% loan to stabilized value. |
| | Rate: 7.35% | | Term: 5 yrs | | Amort: Interest Only | | LTV: 80% | | DCR: 0.60 in-place, 1.10 stabilized | | Prepayment: Make Whole | | Lender Fee: 1% | Recourse: Top 10% recourse
Key Players:
Noah Hahn,
Steve
Bram
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| | | Transaction Description: | | $20,000,000 Fixed Rate, 10 Years Interest-Only, Non-Recourse Financing for Retail Center in Los Angeles, CA. GSP arranged permanent financing for a cash-out, refinance of a Washington Mutual anchored retail center in a prime Los Angeles location. While the sponsor was pulling significant cash out of the property, GSP was still able to locate a lender that would provide 10 years of interest-only payments with no reserves or holdbacks during the entire loan term. The lender will begin collecting reserves for re-tenanting if the two largest tenants don’t renew their leases within six months of expiration. There is no soft or hard lockbox. |
| | Rate: 10 Yr T + 0.95% | | Term: 10 yrs | | Amort: Interest Only | | LTV: 70% | | DCR: 1.50 on an I/O basis | | Prepayment: Yield Maintenance | | Non-recourse | | Lender Fee: Par |
Key Players: David Stepanchak, Allison Higgins |
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| | | Transaction Description: | | $15,000,000 (85% LTC, $34 psf) Bridge Financing for 440,769 Sq. Ft. Industrial Building in Plainfield, Indiana. GSP arranged $15,000,000 of bridge financing (85% LTC) to finance the acquisition and lease-up of a 440,769 sq. ft. industrial building located in Plainfield, Indiana, 15 miles southwest of Indianapolis. Unique Characteristics: The property was completed in November 2006 and is being acquired vacant by the borrower. The loan includes funds to complete the acquisition plus an additional $2,900,000 to fund the carry costs, build-out and lease-up of the property to achieve stabilization. GSP received a loan commitment in 11 business days from signing of term sheet. |
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| | | Interest Rate Update | How Did the Wall Street Journal Economists Fare with their 2006 Interest Rate Predictions? What are they Predicting for 2007? Every year we like to look back at how interest rates fluctuated over the year and discuss the annual WSJ surveys of leading economists’ predictions. Some years they miss the mark; this year, they were very close.
The 10 Year Treasury began 2006 at 4.37% and ended at 4.71%, average rate: 4.80%. The low point was in mid-January when it dipped to 4.34% and the high point was in late June when it reached 5.25%. In the WSJ forecast last year, Robert McGee predicted the year-end yield would be 4.70%; it was 4.71%. He also was the overall winner, correct on several other economic indicators. The group of forecasters as a whole averaged 4.73% for the December 31 prediction, the closest in years.
So, where do the economists think rates are going in 2007? The 60 economists’ predictions for the 10 Year T on June 30, 2007 range from 3.90% to 5.60% and the average is 4.37%. The predictions for the 10 Year T on December 31, 2007 range from 4.00% to 5.65% and the average is 4.83%. Mr. McGee predicts the 10 Year T will be at 4.25% at year-end 2007. Today the 10 year closed at 4.80%.
| | | Congratulations to GSP’s Larry Wilemon! |
Larry and his wife, Katherine, welcome the newest addition to their family. Highlights: (1) Name: Ella Cumberland Wilemon; (2) Birthday: January 16, 2007; (3) Time: 2:11 pm; (4) Weight: 7lbs 4oz; (5) Length: 17 inches.
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©2007 George Smith Partners, Inc. FINfacts is an ePublication of
George Smith Partners, Inc. For Promotional Purposes Only. All Rights Reserved.
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