GSPartners
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Volume XV | No. 43 | November 28, 2007
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KEY RATE INDICES
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Prime Rate
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7.50%
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1 Month LIBOR
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4.81%
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5 Yr US Treasury
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3.45%
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5 Yr Swaps
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4.26%
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12-MAT
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4.79%
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3 Month LIBOR
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5.06%
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10 Yr US Treasury
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3.98%
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10 Yr Swaps
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4.66%
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11th Dist COFI
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4.38%
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6 Month LIBOR
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4.86%
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30 Yr US Treasury
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4.37%
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| | | Transaction Description: | | $26,250,000 (82.47% LTC) Bridge Loan for Acquisition / Reposition of a 65,000 Sq.Ft. Office Building in Del Mar Heights, California. GSP arranged bridge financing for the acquisition of a 64,683 sq.ft., 66-unit office property in Del Mar Heights, California. The subject property is a 1983-built, 3-story, mission-style building offering suites averaging 1,000 sq.ft., high-quality finishes, and extensive landscaping. Unit sizes and classic architecture are unique in the Del Mar Heights office submarket, which is characterized by modern, large floor-plate, Class-A office buildings. The property is currently 87% occupied. Comparable office leases are limited, so GSP segmented the market to isolate small-space leases and focus discussions on local “executive suite” operators. The sponsor requested the option to convert to for-sale condominiums, so the lender agreed to consider partial releases with 30% pre-sales. |
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| | | | Nationwide Lender Offering Five Year Fixed Rate, Interest Only Loans on Stabilized Commercial and Multifamily Properties. Sub-200 spreads. “Add-On” Mezzanine: 12% fixed rate, interest only mezzanine financing available for qualifying, non-stabilized properties up to 1.0 DCR, provided by Lender only. Quote provided in less than one week from receipt of complete package. No kick-out risk, as the Lender will retain all subordinate debt including any mezzanine loan. | | Transaction Size: $10-50M | | Rate: 5 Yr Swaps + 1.70-1.85% | | Loan Term: 5 yrs | | Amort: Interest Only | | Max LTV: Comm: 75%/Apt: 80% | | Min DCR: Comm: 1.20/Apt: 1.15 | | Non-recourse | | Property Types: Stabilized, commercial and multifamily properties | | Geography: Nationwide |
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| | | Interest Rate/CMBS Update | More trouble in the credit markets triggered a “flight to quality” bond market rally. Monday, the 10 Year Treasury yield dropped to 3.85% (!). At press time (as the markets close on Tuesday) the 10 Year T is at 3.95%. Credit crunch: Investors are concerned that as banks continue to absorb losses due to derivatives such as CDO’s and SIV’s, they will have less money to lend. Therefore, spreads are high for all types of debt. CMBS spreads (among those still originating) are still in the 2.50% range. Fixed rate lenders across the spectrum (Life Companies, Commercial Banks, CMBS) are indicating that regardless of the Treasury, all-in coupons are “floored” at approximately 6.00% for full leverage transactions. Bond investors and trading desks feel that is the appropriate yield for real estate risk at this time. Stay tuned…. (David R. Pascale, Jr.) | | | Speakers Corner |
Steve Bram, GSP Principal/Senior Director, will be Guest Speaker at the USC Hillel J.O.B.S. (Jewish Organization of Business Students) Power Luncheon. He will be speaking to a select group of graduate business students about how to combine a successful career with philanthropic activities.
| | | Join Us As We Reach New Heights | At George Smith Partners, we are looking to expand our team of top-notch mortgage brokers – originators and assistants. We offer highly competitive compensation and an excellent environment in which to work, learn and be supported. GSP is committed to providing our employees with cutting edge market information, resources for identifying the best capital sources for each transaction, training opportunities and peer support whenever it is needed.
We invite you to consider a career with George Smith Partners. 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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