GSPartners
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Volume XVI | No. 8 | March 5, 2008
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KEY RATE INDICES
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Prime Rate
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6.00%
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1 Month LIBOR
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3.08%
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5 Yr US Treasury
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2.60%
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5 Yr Swaps
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3.59%
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12-MAT
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4.08%
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3 Month LIBOR
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3.01%
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10 Yr US Treasury
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3.68%
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10 Yr Swaps
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4.44%
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11th Dist COFI
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3.97%
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6 Month LIBOR
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2.88%
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30 Yr US Treasury
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4.58%
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| | | Transaction Description: | | $7,070,000 Non-Recourse Permanent Financing of a 50,000 Sq. Ft. Non-Credit, Single Tenant Fitness Center in Hemet, CA. |
Challenge:
1. The borrowers asked GSP to source aggressively priced permanent debt for a newly constructed 50,000 sq. ft. purpose-built fitness center for a non-credit tenant in a market experiencing a historic slowdown in housing sales.
2. The capital markets displayed significant volatility in spreads during the time period from the bank’s initial issuance of LOI through the date that the borrowers signed the LOI. Subsequently the initially quoted spread increased 20 bps.
3. The ownership structure is a TIC. The bank has not had much experience working with that type of ownership structure.
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Solution:
1. GSP scoured the market for lenders who were comfortable with the risk associated with lending on a non-credit, single tenant, purpose-built fitness facility in a depressed micro-economy. After a thorough search GSP was able to source a lender who was very favorable with the tenant. The tenant’s strong financial wherewithal and their 15 year lease of the facility provided comfort to the bank.
2. The lender agreed to lock the all-in interest rate for 60 days at a spread that is unavailable under their current lending parameters.
3. The experience and financial strength of the sponsors played a large factor in helping the bank get comfortable with the overall financing and ownership structure. |
| | Rate: 5.84% (10 Yr CMT + 1.80%) | | Term: 10 yrs | | Amort: 30 yrs | | LTV: 70% | | Prepayment: 4, 3, 2, 1, 1, 1, 1, 1, 0, 0% | | Non-recourse | | Lender Fee: 0.25% | |
Key Players: Gary E. Mozer, Scott Bottles, Wayne Choi, Brian Bergfield
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| | | | Asset Based Lender with Quick Close Capability and Plenty of Capital for Acquisition, Refinance and Construction Transactions in the Western US. Up to 65% leverage. Very competitive rates. Move fast - can easily close in a week. Mezz and seller subordination allowed. No prepayment penalties. No exit fees. | | Transaction Size: $1-15M | | Rate: 9.99% first 6 mo, 11.99% thereafter | | Loan Term: up to 5 yrs | | Max LTV: 65% | | Recourse | | Property Types: Most | | Prepayment: Open | | Fees: 3.5% | | Geography: Western US |
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| | | Interest Rate Update | The flight to quality (or my other favorite term: “safe haven”) continues with the 10 Year T in the 3.55% range for much of the past week. The 2 Year Treasury closed today (Tuesday) at 1.65%. The market has priced in a 0.50% cut in the Fed Funds rate at the March 18 FOMC meeting. Yields rose today slightly as the Dallas Fed President warned of inflation dangers. LIBOR indices remain around 3.00%, with the 3 Month dropping to 2.99% last week. Credit Spreads: Several fixed rate lenders are instituting floors; many are reluctant to price loans much lower than 6.00%, except for low leverage. Floating rate spreads (construction or bridge) are about 1.50% higher than 2007, ranging from 2.50-4.00%, plus origination fees and sometimes exit fees depending on risk. Stay tuned… (David R. Pascale, Jr.) | | | GSP Welcomes Stella Debibi | George Smith Partners has appointed Stella Debibi as Director of Business Development and Recruitment.
“We are not shy about our mission to add top quality talent and grow our company in size and in depth. Stella is the perfect individual to help us implement our recruitment and targeted business development strategies,” said David Rifkind, principal and managing director of George Smith Partners.
Prior to joining George Smith Partners, Debibi was a business development executive at Stewart Title Co. Prior to that, Debibi was a senior executive and director of business development and marketing for a regional construction engineering firm. She was responsible for expanding the company’s corporate brand and client base. She also implemented a highly successful, multi-state expansion strategy.
“I am eager to begin working with George Smith Partners. I look forward to being part of a dynamic, industry leading firm with deep roots in the Real Estate Finance industry and tremendous growth potential.” Debibi said.
Debibi holds a bachelor’s degree in business administration. She is an active leader in several philanthropies. Her mission and passion is promoting women into leadership positions within the real estate industry. | | | Come Grow With Us | George Smith Partners is expanding its 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 provides its 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 Stella Debibi, Director of Business Development and Recruitment, at (310) 557-8336, Ext. 103. |
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©2008 George Smith Partners, Inc. FINfacts is an ePublication of
George Smith Partners, Inc. For Promotional Purposes Only. All Rights Reserved.
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