GSPartners
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Volume XV | No. 15 | May 2, 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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4.54%
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5 Yr Swaps
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5.02%
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12-MAT
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5.03%
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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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4.64%
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10 Yr Swaps
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5.18%
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11th Dist COFI
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4.30%
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6 Month LIBOR
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5.35%
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30 Yr US Treasury
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4.82%
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| | | Transaction Description: | | $20,800,000 Acquisition Financing (80% of Total Cost, 85% of Purchase Price) for 95,000 Sq. Ft. “Big Box” Retail Center in Eastern Los Angeles County. This three tenant, mid 1990’s vintage, 100% occupied center is adjacent to a regional mall located on a major freeway. All three initial lease terms expire in 2010, but all tenants have 10-15 years of under market extensions. The borrower structured a $1,200,000 re-tenanting reserve which is funded at closing as part of the total project cost. Borrower rate locked early and lender “held the line” on pricing during the week of the “subprime panic” which widened Swaps and credit spreads. |
| | Rate: T + 0.89% | | Term: 10 yrs | | Amort: Interest Only | | LTC: 80% | | DCR: 1.25 | | Prepayment: Defeasance | | Non-recourse | | Lender Fee: Par |
Key Players: Steve Bram, David R. Pascale, Jr.
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| | | Transaction Description: | | $7,500,000 Fixed Rate, Non-recourse Permanent Financing for a 52% Occupied, Three-Story, Retail/Apartment Building in Venice, CA. GSP arranged permanent financing for the refinance of a 17,500 sq. ft., mixed-use property located directly on the boardwalk in Venice. The property consists of four retail and 19 apartment units, including a rooftop penthouse. Originally built in 1921, the property was gutted from a fire several years ago. The owner has just completed a multi-million dollar renovation that took several years to complete and was funded through a combination of insurance proceeds and a construction loan arranged by GSP two years ago. Today, the property is in “better than new” condition and is in the final stages of lease-up. The lender funded the entire loan with no holdbacks, subject to the borrower signing a master lease for the five vacant apartment units (to achieve a minimum DCR level). The master lease goes away once actual tenants are in occupancy. |
| | Rate: 10 Yr T + 1.08% | | Term: 10 yrs | | Amort: Interest Only | | LTV: 56% | | DCR: 1.25 | | Prepayment: Defeasance | | Non-recourse | | Lender Fee: Par |
Key Players: Andrew Levant, Gilda Rivera
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| | | Hot Money | National Lender Providing Senior and Mezzanine Financing for Credit Tenant Lease Opportunities. If the credit of the tenant and the rent due under the lease supports it, lender will finance greater than 100% loan to cost. Can do forward commitments.
Property Types: Any property where there is credit rated (BB- or above) guarantor/master lessee or a public company with equivalent financials.
| | HIGHLIGHTS | | Transaction Size: $5M | | Rate: T + 125-180 | | Loan Term: Up to 30 yrs | | Amort: Up to 30 yrs | | Max LTV: 100% | | Max LTC: 100% (+) | | Min DCR: 1.0 | | Non-recourse | | Prepayment: YM or Defeasance | | Fees: Par | | Geography: Nationwide, Canada, Mexico |
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| | | Interest Rate/CMBS Update | The 10 Year T is 4.65% as conflicting economic data has the bond market “reading the mind” of the Fed as to conflicting dynamics: (1) The subprime crisis and weakness in the housing market may be pushing the economy into a recession which would cause the Fed to lower rates; and (2) Global pricing pressures in raw materials (India and China) and a hot economy in Europe is causing inflation here which would cause the Fed to raise rates. Both may be happening and therein lies the conundrum facing the Fed whose next meeting is May 9. CMBS: Spread widening continues. As one originator remarked, “there’s a new break-even every day.” Stay tuned… (David R. Pascale, Jr.) | | | Speakers Corner | May 3, 2007
Andrew Levant will be presenting a condensed version of his three-part business development sales training seminar entitled “Going for Broker” for the Ramsey-Shilling brokerage firm’s corporate retreat on May 4. Blending education with entertainment, the seminar focuses on the humanistic, mental, psychological, emotional and practical side of the business.
May 8, 2007
David Rifkind, GSP Principal/Managing Director, will be speaking at the USC Lusk Center Board Dinner on May 8, 2007. The topic will be Industry Trends and Opportunities.
May 17, 2007
Steve Bram, GSP Principal and Senior Director, will participate in a panel discussion on “The Apartment Market in 2007: Can a good thing last forever?” at the 2007 San Fernando Valley Economic Summit. Other panelists include:
· Steve Heimler, President and CEO, Stratus Real Estate
· John Walsh, Vice President/Investments, Marcus & Millichap
· Rick Entin, Principal, Entin Properties (moderating)
The panel will explore current market conditions and the near and long term outlook for the multi-family sector in the Greater San Fernando Valley. Panel experts will discuss topics including investment sales activity, management issues, development and conversion activity, and the related debt and equity markets.
The conference is on Thursday May 17, 2007 at 7:30 am – 1:30 pm at the Sheraton Universal Hotel.
| | | 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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