GSPartners
|
|
|
|
Volume XV | No. 44 | December 5, 2007
|
|
|
|
|
|
|
|
|
|
KEY RATE INDICES
|
|
Prime Rate
|
7.5%
|
1 Month LIBOR
|
5.25%
|
5 Yr US Treasury
|
3.32%
|
5 Yr Swaps
|
4.14%
|
|
12-MAT
|
4.66%
|
3 Month LIBOR
|
5.15%
|
10 Yr US Treasury
|
3.93%
|
10 Yr Swaps
|
4.60%
|
|
11th Dist COFI
|
4.23%
|
6 Month LIBOR
|
4.91%
|
30 Yr US Treasury
|
4.39%
|
|
|
|
| | | Transaction Description: | | $12,805,000 (80% LTC) Construction Loan for a Mixed-Use Development in Los Angeles. GSP secured senior construction financing for the in-fill development of 39 units of luxury apartments and 7,000 sq. ft. of ground floor retail with three levels of subterranean parking in West Los Angeles. |
Challenge:
1. Environmental: The site previously held a service station and records showed Underground Storage Tanks were formerly installed at the site.
2. Timing: The borrower wanted to close quickly to pay off the high interest acquisition loan but did not have final permits in place.
3. Market: The borrower projected a rent premium for kosher amenities suitable for Orthodox Jews.
|
Solution:
1. Environmental: GSP worked with the lender and an environmental consultant to show that the tanks had been removed and the site was clean.
2. Timing: Lender agreed to fund the loan prior to final City approvals.
3. Market: The immediately surrounding community contains the highest population of Religious Orthodox Jews in California. GSP worked with the lender and the appraiser to recognize the premium that renters will pay for the kosher features.
|
| | Rate: 30 Day LIBOR + 1.40% | | Term: 24 mos + 2 6-mo extensions | | Amort: Interest Only | | LTV: 75% | | LTC: 80% | | Lender Fee: 0.5%, no fee for the extensions | Recourse: Completion guarantee and 50% repayment guarantee, reduced at C of O and leasing trigger.
Lender held to all original terms.
Key Players: Farzin Emrani, Anna Saucier |
|
|
| | | | Conduit Lender Quoting Fixed Rate Loans on Most Asset Types Nationwide. MAC (Material Adverse Change clause) language can be removed from application provided borrower rate locks at application. Lender locks entire coupon, not just spread. | | Transaction Size: $5M+ | | Rate: 10 Yr T + 2.20- 2.75% | | Loan Term: 10 yrs | | Amort: 1-3 yrs I/O | | Max LTV: 75% | | Min DCR: 1.15 amortizing | | Non-recourse | | Property Types: All asset categories | | Prepayment: Defeasance | | Fees: Par | | Geography: Nationwide |
|
|
| | | Interest Rate/CMBS Update | The 10 Year Treasury is below 3.90% as the flight to quality continues. The 5 Year is below 3.30%, but the premium in spread for 5 year loans is greater than the savings in the index. The bond market continues to price in a rate cut of 0.25% to 0.50% anticipated from next week’s Federal Reserve Meeting. The overall credit markets are intently watching the plan set forth by Treasury Secretary Paulsen to “freeze” adjustable rate subprime mortgages. Will it decrease foreclosures? Will it help soothe the overall credit markets? Loan spreads are still in the T + 2.50-2.75% range with near daily fluctuations in the CMBS markets. Stay tuned… (David R. Pascale, Jr.) | | | In the Press | | | | 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.
|
|
|
|
|
©2007 George Smith Partners, Inc. FINfacts is an ePublication of
George Smith Partners, Inc. For Promotional Purposes Only. All Rights Reserved.
|
|
|
|
|
|
|
|
