GSPartners
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Volume XV | No. 12 | April 11, 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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4.61%
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5 Yr Swaps
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5.08%
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12-MAT
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5.03%
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3 Month LIBOR
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5.35%
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10 Yr US Treasury
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4.71%
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10 Yr Swaps
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5.25%
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11th Dist COFI
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4.38%
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6 Month LIBOR
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5.36%
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30 Yr US Treasury
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4.89%
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| | | Transaction Description: | | $9,500,000 Fixed-Rate, Non-Recourse Permanent Financing for 380,000 Square Feet of Manufacturing and Warehouse Space in Utah. Property consists of two light manufacturing buildings. |
Challenge: The single tenant property is currently occupied by an investment-grade credit tenant with a lease expiring in 2008. There is not a lease or LOI signed to re-tenant the buildings once the current tenant rolls. |
Solution: GSP was able to facilitate 10 year permanent financing with springing reserves (letter of credit) in lieu of an ongoing cash flow sweep.
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| | Rate: 10 Yr T + 1.12% | | Term: 10 yrs | | Amort: I/O yrs 1-3, then 30 yr amort | | LTV: 75% | | Prepayment: Defeasance | | Non-recourse | | Lender Fee: Par | Capital Reserve: $0.10 PSF
TI/LC Reserve: Springing letter of credit
Key Players: Larry Wilemon, David Bierman, Lee Norman |
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| | | Hot Money | National Lender Offering Non-Recourse Ten Year Fixed Rate Financing Open to Prepay at Par in Years 6-10. Ten year loans are prepayable at par the last five years; Seven year loans are open the last three years; and five year loans are open the last two years. Can do step down prepay on all. Interest only payments available, depending on leverage and quality of the real estate, for up to the term of the loan.
Property Types: multifamily, office, retail, industrial, mobile home parks, self storage, hospitality (full service) | | HIGHLIGHTS | | Transaction Size: $2,000,000+ | | Rate: Priced over 10 Year T | | Loan Term: 3-10 yrs | | Amort: I/O up to 10 yrs; Up to 30 yrs amort | | Max LTV: 80% | | Non-recourse | | Fees: Par | | Geography: Nationwide |
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| | | Private Placement Trends | David Rifkind, GSP Principal/Managing Director updates us on the trends we are seeing in our Private Placement business.
“We begin the second quarter of 2007 with over $180 Million in active transactions. The largest identifiable trend is developers and lending institutions seeking our help in restructuring existing projects. With slowing primarily in the housing markets, housing related projects have pushed out their time horizons. We have been able to restart the capital structure, take out or resolve issues with existing participants and allow for a realistic time period to successfully complete these projects. We are also assisting lenders and developers paying off debt at meaningful discounts as some lenders are finding themselves under regulatory scrutiny due to market conditions and exposure to the subprime markets. We expect that we are in the beginning of this trend and expect this environment to heat up and continue for the balance of 2007 and into the first part of 2008. We are in the process of increasing our capacity to make sure that we are able to meet the expected demand for this type of funding. It is exciting to be the catalyst for a high degree of value generation. We are helping our clients turn a headwind into a tailwind.”
Use GSP’s quick-close capability to create value in your transaction. For more information, contact David Rifkind at ext. 124. | | | Interest Rate/CMBS Update | The 10 Year T hit a recent high mark (4.75%) on Friday’s short trading day as traders focused on a stronger than expected jobs report. This week’s rally is driven by bargain hunters capitalizing on the high yield; the 10 Year is now at 4.71%. With few economic reports today and tomorrow, the market is focusing on three Fed governor speeches. After that, CPI and PPI are released at the end of the week. Also note that the yield curve is returning to a more “standard” form with the 30 Year at highest yield. CMBS: Little change this week, less widening across the board, lots of supply. Stay tuned… (David R. Pascale, Jr.) | | | Speakers Corner |
Gary M. Tenzer, GSP Principal/Senior Director, will moderate a panel discussion entitled “New Kids on the Block: An Introduction to New Capital Sources” at the West Coast Structured Finance Conference on Tuesday, May 1, 2007. The event is sponsored by the Los Angeles Mortgage Association (LAMA) and will be at the Skirball Cultural Center, Los Angeles, CA. Panelists include:
· Joan Kramer, Managing Director, Marathon Asset Management
· Jay Rollins, President & CEO, JCR Capital
· Douglas Vikser, President, Coress Capital
· John C. Bauer, Senior Director, Tremont Realty Capital
Steve Bram, GSP Principal/Senior Director, will be a guest lecturer for the Advanced Real Estate Development class taught at the UCLA Anderson School of Business on Wednesday, April 11, 2007. He will speak about designing unique financing structures for real estate acquisitions. The class is taught by Professor Stephen Cauley of the Ziman Center.
| | | | | | Join Us As We Reach New Heights | George Smith Partners is in the midst of a record-setting period of growth. As we continue to reach new heights, we are selectively seeking several seasoned and successful financial professionals to join our team. Please direct confidential inquiries to Todd August, Chief Operating Officer, at (310) 557-8336, Ext. 125.
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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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