GSPartners
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Volume XV | No. 22 | June 20, 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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5.03%
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5 Yr Swaps
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5.54%
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12-MAT
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5.02%
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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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5.12%
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10 Yr Swaps
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5.71%
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11th Dist COFI
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4.22%
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6 Month LIBOR
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5.40%
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30 Yr US Treasury
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5.23%
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| | | Transaction Description: | | $16,000,000 Cash-out Permanent Loan Funded Prior to Construction Completion for a Retail Center in Las Vegas (72% LTV). GSP arranged permanent financing for a 101,300 sq. ft. high image, street frontage retail center located in Las Vegas, NV. GSP was able to structure a take-out loan for the borrower’s 100% of cost construction loan (which GSP also arranged) with approximately $3,500,000 of additional cash out, prior to the completion of construction. The property was 60% pre-leased. There were minimal holdbacks for the remaining construction and GSP arranged for favorable disbursement provisions to facilitate an easy construction completion. |
| | Rate: 10 Yr T + 1.28% | | Term: 10 yr fixed | | Amort: 30 yrs, 3 yrs IO | | LTV: 72% | | LTC: 122% | | DCR: 1.25 | | Prepayment: YM | | Non-recourse | | Lender Fee: Par |
Key Players: Michael Schwartz, Kevin Holliday
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| | | Transaction Description: | | $5,000,000 (80% LTV) Financing for 4,500 Sq. Ft. Beverly Hills Home on Two Acre Estate with Views from Downtown to the Ocean. High net worth borrower requested loan structure minimizing initial monthly payments while maximizing leverage and prepayment flexibility for this acquisition. Borrower plans to develop property as personal retirement estate once permits approved within the next year. |
Challenge: Low Credit Score, lack of immediate liquidity, and tightening residential underwriting standards. |
Solution: GSP provided verification that borrower pays all credit balances in full every month before due, documentation of two pending escrows for properties borrower is in contract to sale, and documentation of borrower’s financial strength in terms of net worth and cash flow generated by his real estate interests. |
| | Rate: Monthly Payment based on 3.225% rate; Actual Rate is 12-MTA + 4.7%. | | Term: 40 yrs | | Amort: 40 yrs | | LTC: 80% | | Lender Fee: 0.50% | Features: Payment increase capped @ 7% annually over 1st 5 yrs of loan. Loan is re-cast after 5 yrs.
Key Players: James Smith, Shahin Yazdi |
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| | | | Attention Developers! Cash-out bridge loans for projects undergoing redevelopment. At least 50% completed project with LOIs to achieve stabilized DCR of 1.25. Structured as a first mortgage with hold backs for remaining work. 115% of project cost, including lender funded interest reserve.
| | Rate: L+2.50% | | Loan Term: 2 yrs with 2 free 1 yr extensions | | Amort: Interest Only | | Max LTV: 65% of stabilized value | | Non-recourse | | Prepayment: 1,0 | | Fees: 0.5% | | Geography: Nationwide |
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| | | Interest Rate/CMBS Update | The 10 Year has settled in the 5.10% range after hitting a five year high of 5.32%. The bond market is back to watching economic reports for signs of inflation. The higher T combined with new spreads and tighter underwriting (specifically much less interest only) has driven the typical mortgage constant up from 5.60% (two months ago) to 7.25% today. Of course property sellers haven’t come off their aggressive cap rates and prices, so buyers/borrowers are facing diminishing returns. Stay tuned… (David R. Pascale, Jr.) | | | 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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