GSPartners
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Volume XV | No. 19 | May 30, 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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4.81%
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5 Yr Swaps
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5.30%
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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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4.87%
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10 Yr Swaps
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5.43%
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11th Dist COFI
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4.30%
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6 Month LIBOR
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5.38%
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30 Yr US Treasury
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5.00%
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| | | Transaction Description: | $72,000,000 Senior and Mezzanine Financing for Partnership Buyout for 216,000 Sq. Ft. Grocery/Drug Anchored Shopping Center in West Los Angeles. The financing allowed for the 25% minority partner to buy out the 75% majority partners with no new cash required. This 100% occupied center sits on an entire city block and is anchored by a Ralph’s, Best Buy and Bally’s. Property Specs: 11 buildings, 31 tenants, 3 acres of land.
Unique Characteristics: (1) Bally’s announcement of difficulties with bond payments during processing caused both lenders to structure holdbacks to be disbursed when tenants’ financial situation improves. (2) In order to accommodate complex tax structure, senior lender funded two bridge loans (on sections of the property) two days before funding the final senior loan. (3) Existing lender defeased two separate loans with the bridge loan proceeds. (4) Both loans include partial releases for potential future development. |
| Senior Debt
Loan Amount: $64,000,000
Rate: 10 Yr T + 1.03%
Term: 10 years
Amort: Interest Only
LTV: 80%
Lender Fee: Par
Non-recourse
Mezzanine Debt
Loan Amount: $8,000,000
Initial Funding: $7,250,000
Earn out: $750,000
Rate: 10.5% fixed
Term: 10 yrs
Amort: Interest Only
Lender Fee: 1.0%
Non-recourse
Combined LTV: 90%
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| | | Transaction Description: | | $12,500,000 Bridge Loan, 96% LTC, on a Spec Estate Home in Montecito, CA. GSP arranged bridge financing for a 98% completed spectacular custom estate residence with a Spanish Mediterranean architectural theme. The home features dramatic ocean and mountain views and sits on 2.92 acres of land containing 11,287 sq. ft. of gross living area that includes 6 bedrooms, 6.5 baths, 4 car garage, pool and spa, and a coach house. It was recently listed on the market for $22,000,000. The loan proceeds were utilized to pay-off a seller carry back note and a subordinated construction loan plus a return of some of the developer’s original equity investment. The bridge loan will eventually be repaid from the sale of the property. |
| | Rate: 7.95 % (fixed) | | Term: 12 mos | | Amort: Interest Only | | LTV: 57% | | LTC: 96% | | Recourse | | Lender Fee: 0.5% | Ext Option: (1) 6 mos
Other: 3 wks closing
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| | | Regional Lender Rolls Out Owner User Program for California.
Attention Owner Users!
Regional lender rolls out owner user program. Sweet spot for transactions sized anywhere from $1,000,000 to $10,000,000. | | Rate: 5 Yr CMT + 2.25% + | | Loan Term: up to 10 yr maturity with rate reset after 5 yrs | | Amort: 25-30 yrs | | Max LTV: 75% | | Min DCR: 1.15, based on appraised NOI | | Prepayment: 3,2,1,0,0 | | Fees: 0.25% - 0.75% | | Geography: California | | Recourse to the owners |
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| | | Interest Rate/CMBS Update | Treasuries continued to slide: (1) Foreign banks continue to sell treasuries in favor of alternate investments such as the Euro, and (2) A bullish consumer confidence report stoked inflation fears and solidified the consensus that “the Fed is on autopilot for a while” not raising, not cutting. CMBS: “Where is the bottom?” That’s what originators are asking. Meanwhile “firming up” is occurring in the CMBS bond market and underwriting standards tighten considerably for new loans. Stay tuned… (David R. Pascale, Jr.) | | | Speakers Corner | Steve Bram, GSP Principal/Senior Director, will be guest speaker at a Real Estate Finance class for the Urban Land Institute’s Developer Training Program on June 9, 2007. The course, titled The Advanced Development Process: Commercial, presents a detailed look at commercial development and redevelopment, with an emphasis on office buildings. Participants will learn about successful projects that found a niche in the market, and the process their developers went through from conception to completion.
The class is June 8-11, 8:15am – 6:00 pm.
Faculty:
Mark S. Hassinger
President, WestDulles Properties
Louis H. Masotti
President, Louis H. Masotti, Ltd.
| | | 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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